A Handbook on Labour Laws of India

PREFACE To secure to each labourer the whole product of his labour, or as nearly as possible, is a worthy object of any good Govern ent! said Abraham Lincoln"

Industrialisation poses a challenge for an entrepreneur in the form of management of the resources. The management and effective and efficient deployment of the resources of the organisation is the factor which decides the profitability and viability of any organisation .Labour is one of the basic resources of any industry and has an important bearing on the performance and goals of the organisation. In India we have a plethora of Laws which deals with issues concerning Labour administration, labour welfare, regulation of industrial relations between the management and the workers. For the effective and efficient management of labour in an industry or an organisation it is necessary to have a complete knowledge of the Laws, bye laws, regulations and ordinances applicable to the industry in general and to the company or organisation specifically. The laws and bye laws applicable to labour issues and interests provides for various compliances in accordance with procedures laid therein. This book provides a brief insight into the Laws, bye laws, Regulations, notifications applicable to labour and labour issues. The salient features of the entral Labour Acts in force in India are given here under! The Indian

Factories Act of "#$% provides for the health, safety and welfare of the workers. The &hops and ommercial 'stablishment Act regulates the conditions of work and terms of employment of workers engaged in shops, commercial establishments, theatres, restaurants, etc. The (aternity )enefit Act provides for the grant of cash benefits to women workers for specified periods before and after confinements. The 'mployment of hildren Act, "#*%, prohibits the employment of The young children below the age of "+ years in certain risky and unhealthy occupations.

payment of wages Act, "#*,, regulates the timely payment of wages without any unauthori-ed deductions by the employers. The (inimum .ages Act, "#$%, ensures the fi/ation and revision of minimum rates of wages in respect of certain scheduled industries involving hard labour. The Industrial 0isputes Act, "#$1, provides for the investigation, and settlement of industrial disputes by mediation, conciliation, ad2udication and arbitration, there is scope for payment of compensation in cases of lay3off and retrenchment. The Industrial 'mployment 4&tanding 5rders6 Act, "#$,, re7uires employers in Industrial establishments to define precisely the conditions of employment under them and make them known to their workmen. These rules, once certified, are binging on the parties for a minimum period of si/ months. The .orkmen8s ompensation Act, "#9*, provides for compensation to in2ured workmen of certain categories and in the case of fatal accidents to their dependants if the accidents arose out of and in the course of their employment. It also provides for payment of compensation in the case of certain occupational diseases. The Indian Trade :nions Act, "#9,, recogni-es the right of workers to organise into trade unions, and when registered, they have certain rights and obligations and function as autonomous bodies. The 'mployees8 &tate Insurance Act, "#$%, provides for sickness benefit, maternity benefit, disablement benefit and medical benefit. The 'mployees8

;rovident Fund Act, "#+9, seeks to make a provision for the future of industrial worker after he retires or in case he is retrenched, or for his dependents in case of his early death. The labour welfare work, thus, covers a wide range of activities and in its present form is widely recognised and is regarded as an integral part of the industrial system and management.

TABLE OF CONTENTS
Part 1 Introduction "." ".9 ".* ".$ .hat is Labour Law< lassification of =arious Labour Laws Labour >urisdiction3 &tate vs entral Labour ;olicy of India #art $ %entral Labour Laws 9." 9.9 9.* 9.$ 9.+ 9., 9.1 9.% 9.# 9."A The Factories Act, "#$% hild Labour 4;rohibition and Regulation6 Act, "#%, )onded Labour &ystem 4Abolition6 Act, "#1, The 'mployment '/changes 4 ompulsory ?otification of =acancies6 Act, "#+# Apprentices Act, "#," 'mployees ;rovident Fund and (iscellaneous ;rovisions Act, "#+9 The 'mployees &tate Insurance Act 4'&I Act6, "#$% ;ayment of @ratuity Act, "#19 ;ayment of )onus Act, "#,+ ;ayment of .ages Act, "#*, #art & Labour Law %oncessions *." *.9 Labour Laws and &&I Labour Laws and &'B #art ' (hich court to approach in case of a labour dispute) $." $.9 $.* >udicial &ystem in India .here to file< .hat matters fall within the 2urisdiction of Industrial Tribunals<

$.$ $.+ $.,

.hat matters fall within the >urisdiction of Labour ourts< &tages of ad2udication in labour or industrial disputes (ediation in Labour 0isputes #art *

+." +.9

Address of Labour ommissioners About the Author

Part 1 Introduction +"+ (hat is Labour Law) .ikipedia, the internet encyclopedia defines labour law as CLabour Law is the body of laws, administrative rulings, and precedents which address the relationship between and among employers, employees, and labor organi-ations, often dealing with issues of public lawD. The terms Labour Laws and 'mployment Laws, are often interchanged in the usage. This has led to a big confusion as to their meanings. Labour Laws are different from employment laws which deal only with employment contracts and issues regarding employment and workplace discrimination and other private law issues. 'mployment Laws cover broader area than labour laws in the sense that employment laws cover all the areas of employerEemployee relationship e/cept the negotiation process covered by labour law and collective bargaining. Labour Laws harmoni-e many angles of the relationship between trade unions, employers and employees. In some countries 4like distinction is made. The final goal of labour law is to bring both the employer and the employee on the same level, thereby mitigating the differences between the two ever3warring groups. ,rigins of Labour Laws Labour laws emerged when the employers tried to restrict the powers of workersF organisations and keep labour costs low. The workers began demanding better conditions and the right to organise so as to improve their standard of living. 'mployer8s costs increased due to workers demand to win higher wages or better working conditions. This led to a chaotic situation which anada6, employment laws related to unionised workplaces are different from those relating to particular individuals. In most countries however, no such

re7uired the intervention of @overnment. In order to put an end to the disputes between the ever3 warring employer and employee, the @overnment enacted many labour laws. In India the labour laws are so numerous, comple/ and ambiguous that they promote litigation rather than the resolution of problems relating to industrial relations. The labour movement has contributed a lot for the enactment of laws protecting labour rights in the "#th and 9Ath centuries. The history of labour legislation in India can be traced back to the history of )ritish colonialism. The influences of )ritish political economy were naturally dominant in sketching some of these early laws. In the beginning it was difficult to get enough regular Indian workers to run )ritish establishments and hence laws for chartering workers became necessary. This was obviously labour legislation in order to protect the interests of )ritish employers. The )ritish enacted the Factories Act with a really self3centered motive. It is well known that Indian te/tile goods offered serious competition to )ritish te/tiles in the e/port market. In order to make India labour costlier, the Factories Act was first introduced in "%%* because of the pressure brought on the )ritish parliament by the te/tile moguls of (anchester and Lancashire. Thus we received the first stipulation of eight hours of work, the abolition of child labour, and the restriction of women in night employment, and the introduction of overtime wages for work beyond eight hours. .hile the impact of this measure was clearly for the welfare of the labour force the real motivation was undoubtedly the protection their vested interests. India provides for core labour standards of IL5 for welfare of workers and to protect their interests. India has a number of labour laws addressing various issues such as resolution of industrial disputes, working conditions, labour compensation, insurance, child labour, e7ual remuneration etc. Labour is a sub2ect in the concurrent list of the Indian governments have enacted laws on labour issues. onstitution and is therefore in the 2urisdiction of both central and state governments. )oth central and state entral laws grant powers to officers under central government in some cases and to the officers of the state governments in some cases.

+"$ %lassification of -arious Labour Laws There are over $+ legislations on labour from the entral @overnment and the number of entral Acts.

legislations enacted by the &tate @overnments is close to four times that of the Labour Laws can be classified into the following eight categories! 4i6 4ii6 Laws related to Industrial Relations Laws related to .ages

4iii6 4iv6 4v6 4vi6 4vii6 4viii6

Laws related to &pecific Industries Laws related to '7uality and 'mpowerment of .omen Laws related to 0eprived and 0isadvantaged &ections of the &ociety Laws related to &ocial &ecurity Laws related to 'mployment G Training 5thers

Laws related to Industrial .elations " 9 * The Trade :nions Act, "#9, The Industrial 'mployment 4&tanding 5rders6 Act, "#$, The Industrial 'mployment 4&tanding 5rders6 Rules, "#$, The Industrial 0isputes Act, "#$1

Laws related to (ages " 9 * $ The ;ayment of .ages Act, "#*, The ;ayment of .ages Rules, "#*1 The (inimum .ages Act, "#$% The (inimum .ages 4 entral6 Rules, "#+A The .orking >ournalist 4Fi/ation of Rates of .ages6 Act, "#+% .orking >ournalist 4 onditions of service6 and (iscellaneous ;rovisions Rules, "#+1 The ;ayment of )onus Act, "#,+ The ;ayment of )onus Rules, "#1+ Laws related to /pecific Industries " 9 * $ + The Factories Act, "#$% The 0ock .orkers 4Regulation of 'mployment6 Act, "#$% The ;lantation Labour Act, "#+" The (ines Act, "#+9 The .orking >ournalists and other ?ewspaper 'mployees8 4 onditions of &ervice and (isc. ;rovisions6 Act, "#++ The .orking >ournalists and other ?ewspaper 'mployees8 4 onditions of &ervice and (isc. ;rovisions6 Rules, "#+1 , 1 % # "A The (erchant &hipping Act, "#+% The (otor Transport .orkers Act, "#," The )eedi G igar .orkers 4 onditions of 'mployment6 Act, "#,, The ontract Labour 4Regulation G Abolition6 Act, "#1A The &ales ;romotion 'mployees 4 onditions of &ervice6 Act, "#1,

The &ales ;romotion 'mployees 4 onditions of &ervice6 Rules, "#1, "" "9 "* The Inter3&tate (igrant .orkmen 4Regulation of 'mployment and Act, "#1# The &hops and 'stablishments Act The "#%" The "#%$ The ine .orkers8 .elfare Fund Act, "#%". "$ "+ ", "1 "% "# 9A 9" 99 9* 9$ 9+ 9, The 0ock .orkers 4&afety, Health G .elfare6 Act, "#%, The )uilding G 5ther &ervice6 Act, "##, The 0ock .orkers 4Regulation of 'mployment6 4inapplicability to (a2or ;orts6 Act, "##1 The (ica (ines Labour .elfare Fund Act, "#$, The Limestone G 0olomite (ines Labour .elfare Fund Act, "#19 The )eedi .orkers .elfare Fund Act, "#1, The )eedi .orkers .elfare Act, "#1, The Iron 5re (ines, (anganese 5re (ines G Act, "#1, The ine .orkers .elfare Fund Act, "#%" The ine .orkers .elfare "##* The oal (ines 4 onservation and 0evelopment6 Act, "#1$ ess Act, "#%" onstruction of 0ry latrines ;rohibition Act, The 'mployment of (anual &cavengers and hrome 5re (ines Labour .elfare ess ess Act, "#1, hrome 5re (ines Labour .elfare Fund The Iron 5re (ines, (anganese 5re (ines G onstruction .orkers 4Regulation of 'mployment G onditions of inema .orkers and inema Theatre .orkers 4Regulation of 'mployment6 Rules, inema .orkers and inema Theatre .orkers 4Regulation of 'mployment6 Act, onditions of &ervice6

Laws related to 01uality and 0 power ent of (o en " 9 The (aternity )enefit Act, "#," The '7ual Remuneration Act, "#1,

Laws related to 2eprived and 2isadvantaged /ections of the /ociety " 9 The )onded Labour &ystem 4Abolition6 Act, "#1, The hild Labour 4;rohibition G Regulation6 Act, "#%,

Laws related to /ocial /ecurity " The .orkmen8s ompensation Act, "#9*

9 * $

The 'mployees8 &tate Insurance Act, "#$% The 'mployees8 ;rovident Fund G (iscellaneous ;rovisions Act, "#+9 The ;ayment of @ratuity Act, "#19

Laws related to 0 ploy ent 3 Training " 9 ,thers " 9 * $ + , 1 % # The Fatal Accidents Act, "%++ The .ar In2uries 5rdinance Act, "#$* The .eekly Holiday Act, "#$9 The ?ational and Festival Holidays Act The .ar In2uries 4 ompensation Insurance6 Act, "#$* The ;ersonal In2uries 4'mergency6 ;rovisions Act, "#,9 The ;ersonal In2uries 4 ompensation Insurance6 Act, "#,* The Labour Laws 4'/emption from Furnishing Returns and (aintaining Register by ertain 'stablishments6 Act, "#%% The ;ublic Liability Insurance Act, "##" The 'mployment '/changes 4 ompulsory ?otification of =acancies6 Act, "#+# The 'mployment '/changes 4 ompulsory ?otification of =acancies6 Rules, "#+# The Apprentices Act, "#,"

".* Labour 4urisdiction5/tate vs %entral 6nder the %onstitution of India, Labour is a subject in the %oncurrent List where both the %entral 3 /tate Govern ents are co petent to enact legislation subject to certain being reserved for the %entre" %onstitutional /tatus :nion List oncurrent List atters

'ntry ?o. ++ ! Regulation of labour and safety in 'ntry ?o. 99! Trade :nionsI industrial and labour mines and oil fields disputes.

'ntry ?o. ,"! Industrial disputes concerning 'ntry ?o.9*! &ocial &ecurity and insurance, :nion employees employment and unemployment.

'ntry ?o.,+! :nion agencies and institutions for 'ntry ?o. 9$! .elfare of about including J=ocational ...training...J conditions of work, provident funds, employers

Finvalidity and old age pension and maternity benefit. (atters relating to &ocial &ecurity are 0irective ;rinciples of &tate ;olicy and the sub2ects in the oncurrent List. The following social security issues are mentioned in the in the &eventh &chedule of the onstitution of India6 K Ite Ite 7o" $&8 &ocial &ecurity and insurance, employment and unemployment. 7o" $'! .elfare of Labour including conditions of work, provident funds, employers8 liability, oncurrent List 4List III

workmen8s compensation, invalidity and old age pension and maternity benefits. #art III 9unda ental .ights Article+:" 01uality of opportunity in atters of public e ploy ent"5

4"6 There shall be e7uality of opportunity for all citi-ens in matters relating to employment or appointment to any office under the &tate. 496 ?o citi-en shall, on grounds only of religion, race, caste, se/, descent, place of birth, residence or any of them, be ineligible for, or discriminated against in respect of, any employment or office under the &tate. 4*6 ?othing in this article shall prevent ;arliament from making any law prescribing, in regard to a class or classes of employment or appointment to an office under the @overnment of, or any local or other authority within, a &tate or :nion territory, any re7uirement as to residence within that &tate or :nion territoryL prior to such employment or appointment. 4$A6 ?othing in this article shall prevent the &tate from making any provision for reservation in matters of promotion to any class or classes of posts in the services under the &tate in favour of the &cheduled astes and the &cheduled Tribes which, in the opinion of the &tate, are not ade7uately represented in the services under the &tate. 4$)6 ?othing in this article shall prevent the &tate from considering any unfilled vacancies of a year which are reserved for being filled up in that year in accordance with any provision for reservation made under clause 4$6 or clause 4$A6 as a separate class of vacancies to be filled up in any succeeding year or years and such class of vacancies shall not be considered together

with the vacancies of the year in which they are being filled up for determining the ceiling of fifty per cent reservation on total number of vacancies of that year. 4+6 ?othing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or any member of the governing body thereof shall be a person professing a particular religion or belonging to a particular denomination.

Article$'" #rohibition of e ploy ent of children in factories, etc" M?o child below the age of fourteen years shall be employed to work in any factory or mine or engaged in any other ha-ardous employment. #art I- 2irective #rinciples of /tate #olicy Article '+ .ight to work, to education and to public assistance in certain cases The &tate shall, within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want. Article '$ #rovision for just and hu ane conditions of work and aternity relief

The &tate shall make provision for securing 2ust and humane conditions of work and for maternity relief.

Article'&" Living wage, etc", for workers .MThe &tate shall endeavour to secure, by suitable legislation or economic organisation or in any other way, to all workers, agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full en2oyment of leisure and social and cultural opportunities and, in particular, the &tate shall endeavour to promote cottage industries on an individual or co3operative basis in rural areas.

Article'&A" #articipation of workers in

anage ent of industries .MThe &tate shall take

steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisations engaged in any industry. +"' Labour #olicy of India

Labour policy in India has been evolving in response to specific needs of the situation to suit re7uirements of planned economic development and social 2ustice and has two3fold ob2ectives, vi-., maintaining industrial peace and promoting the welfare of labour. Labour #olicy Highlights reative measures to attract public and private investment. reating new 2obs ?ew &ocial security schemes for workers in the unorganised sector. &ocial security cards for workers. :nified and beneficial management of funds of .elfare )oards. Reprioriti-ation of allocation of funds to benefit vulnerable workers. (odel employee3employer relationships. Long term settlements based on productivity. =ital industries and establishments declared as Npublic utilitiesN. &pecial conciliation mechanism for pro2ects with investments of Rs."+A crores or more. Industrial Relations committees in more sectors. Labour Law reforms in tune with the times. 'mpowered body of e/perts to suggest re7uired changes. &tatutory amendments for e/pediting and streamlining the mechanism of Labour >udiciary. Amendments to Industrial 0isputes Act in tune with the times. 'fficient functioning of Labour 0epartment. (ore labour sectors under (inimum .ages Act. hild labour act to be aggressively enforced.

(odern medical facilities for workers. Rehabilitation packages for displaced workers. Restructuring in functioning of employment e/changes. data base. omputeri-ation and updating of

Revamping of curriculum and course content in industrial training. >oint cell of labour department and industries department to study changes in laws and rules.

The 9actories Act, +;'<

,bjectives ". To ensure ade7uate safety measures and to promote the health and welfare of the workers employed in factories. 9. To prevent hapha-ard growth of factories through the provisions related to the approval of plans before the creation of a factory. Applicability of the Act ". Applicable to the whole of India including >ammu G Oashmir. 9. overs all manufacturing processes and establishments falling within the definition of Pfactory8. *. Applicable to all factories using power and employing "A or more workers, and if not using power, employing 9A or more workers on any day of the preceding "9 months. /che e of the Act ". The Act consists of "9A &ections and * &chedules. 9. &chedule " contains list of industries involving ha-ardous processes *. &chedule 9 is about permissible level of certain chemical substances in work environment. $. &chedule * consists of list of notifiable diseases. I portant provisions the Act 9acilities and %onveniences 3 The factory should be kept clean. Q&ection ""L. There should be arrangement to dispose of wastes and effluents. Q&ection "9L. =entilation should be ade7uate.

Reasonable temperature for comfort of employees should be maintained. Q&ection "*L. 0ust and fumes should be controlled below permissible limits. Q&ection "$L. Artificial humidification should be at prescribed standard level. Q&ection "+L. 5vercrowding should be avoided. Q&ection ",L. Ade7uate lighting, drinking water, latrines, urinals and spittoons should be provided. Q&ections "1 to "#L. Ade7uate spittoons should be provided. Q&ection 9AL. (elfare 3 Ade7uate facilities for washing, sitting, storing cloths when not worn during working hours. Q&ection $9L. If a worker has to work in standing position, sitting arrangement to take short rests should be provided. Q&ection $$L. Ade7uate First aid bo/es shall be provided and maintained Q&ection $+L. 9acilities in case of large factories 3 Following facilities are re7uired to be provided by large factories 3 R Ambulance room if +AA or more workers are employed R anteen if 9+A or more workers are employed. It should be sufficiently lighted and ventilated and suitably located. Q&ection $,L. R Rest rooms E shelters with drinking water when "+A or more workmen are employed Q&ection $1L R rSches if *A or more women workers are employed. Q&ection $%L R Full time .elfare 5fficer if factory employs +AA or more workers Q&ection $#L R &afety 5fficer if ",AAA or more workmen are employed. /afety 3 All machinery should be properly fenced to protect workers when machinery is in motion. Q&ection 9" to 91L. Hoists and lifts should be in good condition and tested periodically. Q&ection 9% and 9#L. ;ressure plants should be checked as per rules. Q&ection *"L. Floor, stairs and means of access should be of sound construction and free form obstructions. Q&ection *9L. &afety appliances for eyes, dangerous dusts, gas, fumes should be provided. Q&ections *+ and *,L. .orker is also under obligation to use the safety appliances. He should not misuse any appliance, convenience or other things provided. Q&ection """L. In case of ha-ardous substances, additional safety measures have been prescribed. Q&ections $"A to $"HL. 3 3 Ade7uate fire fighting e7uipment should be available. Q&ection *%L. 3 3 &afety 5fficer should be appointed if number of workers in factory are ",AAA or more. Q&ection $A)L. (orking Hours 3 A worker cannot be employed for more than $% hours in a week. Q&ection +"L. .eekly holiday is compulsory. If he is asked to work on weekly holiday, he should have full holiday on one of three days immediately or after the normal day of holiday. Q&ection +94"6L. He cannot be employed for more than # hours in a day. Q&ection +$L. At least half an hour rest should be provided after + hours. Q&ection ++L. Total period of work inclusive of rest interval cannot be more than "A.+ hours. Q&ection +,L. A worker should be given a weekly holiday. 5verlapping of shifts is not permitted. Q&ection +%L. ?otice of period of work should be displayed. Q&ection ,"L.

,verti e (ages 3 If a worker works beyond # hours a day or $% hours a week, overtime wages are double the rate of wages are payable. Q&ection +#4"6L. A workman cannot work in two factories. There is restriction on double employment. Q&ection ,AL. However, overtime wages are not payable when the worker is on tour. Total working hours including overtime should not e/ceed ,A in a week and total overtime hours in a 7uarter should not e/ceed +A. Register of overtime should be maintained. 3 3 An employee working outside the factory premises like field workers etc. on tour outside head7uarters are not entitled to overtime. K R Ananthan v. Avery India "#194$96 F>R *A$ 4(ad H 6 R 0irector of &tores v. ; & 0ube "#1% Lab I "#1% I LL? $,$ T *, FLR $9A. 0 ploy ent of (o en 3 A woman worker cannot be employed beyond the hours , a.m. to 1.AA pm. &tate @overnment can grant e/emption to any factory or group or class of factories, but no woman can be permitted to work during "A ;( to + A(. &hift change can be only after weekly or other holiday and not in between. Q&ection ,,L. 7ight /hift for wo en8 Factories Act is proposed to be amended to allow night shift for women workers. The @overnment has decided to amend &ection ,, of the Factories Act, "#$% to allow employment of women workers between 1.AA pm and ,.AA am. The demand of women8s organisations and in tune with the present economic globali-ation, the @overnment has decided to bring in then re7uired changes in the Act. This fle/ibility would be available to all manufacturing units including the apparel sector. This decision has been taken after meetings with the representatives of the employers and the trade unions. The proposed )ill will empower the &tate @overnments for allowing the necessary fle/ibility in employment of women during night shift in factories. The proposed amendment would inter3alia provide that the employer has to ensure occupational safety and ade7uate protection to the women workers. However, the &tate @overnment or any person authorised by it would be allowing employment of women during night only after consulting the workers or their representative organisations and concerned employers or their representatives. The &tate @overnments are also empowered to frame their own rules for allowing such permissions. .ecord of (ork en 3 A register 4muster roll6 of all workers should be maintained. ?o worker should be permitted to work unless his name is in the register. Record of overtime is also re7uired to be maintained. Q&ection ,9L. *#A T +9 F>R 9## T

Leave 3 A worker is entitled in every calendar year annual leave with wages at the rate of one day for every 9A days of work performed in the previous calendar year, provided that he had worked for 9$A days or more in the previous calendar year. hild worker is entitled to one day per every "+ days. .hile calculating 9$A days, earned leave, maternity leave upto "9 weeks and lay off days will be considered, but leave shall not be earned on those days. Q&ection 1#L. K Leave can be accumulated upto *A days in case of adult and $A days in case of child. Leave admissible is e/clusive of holidays occurring during or at either end of the leave period. .age for period must be paid before leave begins, if leave is for $ or more days. Q&ection %"L. Leave cannot be taken for more than three times in a year. Application for leave should not normally be refused. QThese are minimum benefits. 'mployer can, of course, give additional or higher benefitsL. (ages for ,T and Leave /alary 3 F.agesF for leave encashment and overtime will include dearness allowance and cash e7uivalent of any benefit. However, it will not include bonus or overtime. %hild 0 ploy ent 3 hild below age of "$ cannot be employed. Q&ection ,1L. hild above "$

but below "+ years of age can be employed only for $.+ hours per day or during the night. Q&ection 1"L. He should be certified fit by a certifying surgeon. Q&ection ,%L. He cannot be employed during night between "A pm to , am. Q&ection 1"L. A person over "+ but below "% years of age is termed as Padolescent8. He can be employed as an adult if he has a certificate of fitness for a full dayFs work from certifying surgeon. An adolescent is not permitted to work between 1 pm and , am. Q&ection 1AL. There are more restrictions on employment of female adolescent. 3 3 Register of child workers should be maintained. Q&ection 1*L. 2isplay on 7otice =oard 3 A notice containing abstract of the Factories Act and the rules made thereunder, in 'nglish and local language should be displayed. ?ame and address of Factories Inspector and the certifying surgeon should also be displayed on notice board. Q&ection "A%4"6L. 7otice of Accidents, 2iseases 0tc" 3 ?otice of any accident causing disablement of more than $% hours, dangerous occurrences and any worker contacting occupational disease should be informed to Factories Inspector. Q&ection %%L. ?otice of dangerous occurrences and specified diseases should be given. Q&ections %%A and %#L. ,bligation regarding Ha>ardous #rocesses ? /ubstances 3 Information about ha-ardous substances E processes should be given. .orkers and general public in vicinity should be informed about dangers and health ha-ards. &afety measures and emergency plan should be ready. &afety ommittee should be appointed. List of Industries Involving Ha>ardous #rocesses

TH0 9I./T /%H026L0 @/ee /ection $AcbBC ". Ferrous metallurgical Industries 3 Integrated Iron and &teel 3 Ferro3alloys 3 &pecial &teels 9. ?on3ferrous metallurgical Industries 3 ;rimary (etallurgical Industries, namely, -inc, lead, copper manganese and aluminium *. Foundries 4ferrous and non3ferrous6 3 astings and forgings including cleaning or smoothingEroughening by sand and shot blasting. $. oal 4including coke6 industries. 3 oal, Lignite, oke, etc. 3 Fuel @ases 4including oal gas, ;roducer gas, .ater gas6

+. ;ower @enerating Industries ,. ;ulp and paper 4including paper products6 industries 1. Fertiliser Industries 3 ?itrogenous 3 ;hosphatic 3 (i/ed %. ement Industries 3 ;ortland ement 4including slag cement, pu--olona cement and their products6 #. ;etroleum Industries

3 5il Refining 3 Lubricating 5ils and @reases "A. ;etro3chemical Industries "". 0rugs and ;harmaceutical Industries 3 ?arcotics, 0rugs and ;harmaceuticals "9. Fermentation Industries 40istilleries and )reweries6 "*. Rubber 4&ynthetic6 Industries "$. ;aints and ;igment Industries "+. Leather Tanning Industries ",. 'lectro3plating Industries "1. hemical Industries oaltar 0istillation ;roducts

3 oke 5ven by3products and

3 Industrial @ases 4nitrogen, o/ygen, acetylene, argon, carbon3dio/ide, hydrogen, sulphur3 dio/ide, nitrous o/ide, halogenated hydro3carbon, o-one etc.6 3 Industrial arbon 3 Alkalies and Acids 3 hromates and dichromates 3 Leads and its compounds 3 'lectrochemicals 4metallic sodium, potassium and magnesium, chlorates, perchlorates and pero/ides6 3 'lectrothermal produces 4artificial abrasive, calcium carbide6 3 ?itrogenous compounds 4cyanides, cyanamides and other nitrogenous compounds6

3 ;hosphorous and its compounds 3 Halogens and Halogenated compounds 4 hlorine, Fluorine, )romine and Iodine6 3 '/plosives 4including industrial e/plosives and detonators and fuses6 "%. Insecticides, Fungicides, herbicides and other ;esticides Industries "#. &ynthetic Resin and ;lastics 9A. (an3made Fibre 4 ellulosic and non3cellulosic6 Industry 9". (anufacture and repair of electrical accumulators 99. @lass and eramics

9*. @rinding or gla-ing of metals 9$. (anufacture, handling and processing of asbestos and its products 9+. '/traction of oils and fats from vegetable and animal sources 9,. (anufacture, handling and use of ben-ene and substances containing ben-ene 91. (anufacturing processes and operations involving carbon disulphide 9%. 0yes and 0yestuff including their intermediates 9#. Highly flammable li7uids and gases. #0.DI//I=L0 L0-0L/ ,9 %0.TAI7 %H0DI%AL /6=/TA7%0/ I7 (,.E 07-I.,7D07T TH0 /0%,72 /%H026L0 @/ee /ection '+9C /l" 7o" r

/ubstance e

#er issible li its of eFposure Ti e5(eighted average AT(AB /hort5ter eFposure A/T0LB

concentration AT(AB a + " 9 * $ + , 1 % # "A "" "9 "* "$ "+ ", "1 "% "# 9A 9" 99 9* 9$ 9+ 9, 91 9% A $ Acetaldehyde Acetic Acid Acetone Acrolein Acrylonitrile3skin 4&. 6 Aldrin3skin Allyl hloride Ammonia Aniline3skin Anisidine 45.;.isomers63 skin Arsenic G &oluble compounds 4as As6 )en-ene 4&. 6 )eryllium G 4as )e6 4&. 6 )oron trifluoride )romine )utane 93)utanone ?3)utyl acetate ?3)utyl alcohol3skin3 &ceEtert, )utyl acetate )utyl (ercaptan admium3dust and salts 4as d6 alcium o/ide arbaryl 4&evin6 arbofuran 4Furadan6 arbon disulphide3skin arbon mono/ide arbon tetrachloride3skin 4&. .6 4(ethyle ethyle Oetone ('O6 ompounds ## & "AA "A 1+A A" 9 3 " A.9+ 9 A." 3 "A 3 " A." %AA 9AA "+A +A 9AA A.+ 3 3 3 3 "A +A + ' "%A 9+ "1%A A.9+ $.+ A.9+ * "% "A A.+ A.9 *A A.AA9 * A.1 "#AA +#A 1"A "+A #+A ".+ A.A+ 9 + A." *A ++ *A g? &

li its in"B ## * "+A "+ "AAA A.* 3 3 9 *+ 3 3 3 3 3 3 A.* 3 *AA 9AA 3 3 3 3 3 3 3 3 $AA 3

A+*

g? & : 91A *1 9*1+ A.% 3 3 , 91 3 3 3 3 3 3 9 3 %%+ #+A 3 3 3 3 3 3 3 3 $$A 3

9# *A *" *9 **

hlordane3skin hlorine hloroben-ene 4monochloroben-ene6 hloroform 4&. .6 bis34 hloromethyl6 ether 4H. .6 hromic acid and

3 " 1+ "A A.AA"

A.+ * *+A +A A.AA+

3 * 3 3 3

9 # 3 3 3

*$ *+ *, *1 *% *# $A $" $9 $* $$ $+ $, $1 $% $# +A +" +9 +* +$ ++ +, +1 +% +# ,A

chromates 4as r6 4.ater 3 soluble6 hromous &alts 4as r6 opper fume otton dust, raw yanides 4as n63skin yanogen 00T 40ichlorodiphenyl Trichloroethane6 0emeton3skin 0ia-inon3skin 0ibutyl ;hythalate 0ieldrin3skin 0initroben-ene isomers63skin 0initrotoluene3skin 0iphenyl 4)iphenyl6 'ndosulfan skin 'ndrin3skin 'thyl acetate 'thyl alcohol 'thylamin Fluorides 4as F6 Fluorine Formaldehyde 4&. .6 Formic Acid @asoline Hydra-ine3skin 4&. .6 4Thiodan63 4all 3 3 3 3 "A 3 A.A" 3 3 3 A."+ 3 A.9 3 3 $AA "AAA "A 3 " ".A + *AA A."

A.A+ A.+ A.9 A.9 99 + 9A " A." A." + " A.9+ " ".+ ".+ A." A." "$AA "#AA "% 9.+ 9 ".+ # #AA A."

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 9 9 3 +AA 3

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 $ * 3 "+AA 3

resoal, all isomers3skin +

0ichlorous 400=;63skin 3

," ,9 ,* ,$ ,+ ,, ,1 ,% ,# 1A 1" 19 1* 1$ 1+ 1, a a a 11 1% 1# %A %" %9 %* %$ %+

Hydrogen Hydrogen

hloride3 yanide skin3

+ "A * " "A A." 3 "AA "AA +A 3 3 3

1 "A 9.+ ".+ "$ " + +9+ *,A "+A A."+ A.+ "A + " a A.A" A.A+ A." 9,A ", 9A+ A.A+ +A A.*+ + *A +

a 3 3 3 "+ 3 3 3 "9+ 3 3 3 3 3 3 a 3 3 3 9+A 3 1+ 3 "+ 3 $ 3 3

a 3 3 3 9" 3 3 3 $+A 3 3 3 3 3 * a A.A* 3 3 *"A 3 *AA 3 1+ 3 "A 3 3

Hydrogen Fluoride 4as F63 Hydrogen ;ero/ide Hydrogen &ulphide Iodine3 Iron 5/ide Fume 4FA9A*6 4as Fe6 Isoamyl acetate Isoamyl alcohol Isobutyl alcohol Lead, inorg, dusts, dusts and fumes 4as ;b6 Lindane3skin (alathion3skin (anganese (anganese (n6 (ercury 4as Hg63skin 4i6 Alkyle compounds 4ii6 All forms e/cept alkyle vapour 4iii6 Aryle and inorganic compounds (ethyl 4(ethanol63skin (ethyl cellosolve 493 metho/yethanol63skin (ethyl isobutyl Oetone (ethyl Isocyanate3skin ?aphthalene ?ickel carbonyl 4as ?i6 ?itric acid ?itric 5/ide ?itroben-ene3skin alcohol dust Fume and 4as compounds 4as 4(n63

3 3 a 3 3 3 9AA + +A A.A9 "A A.A+ 9 9+ "

%, %1 %% %# #A #" #9 #* #$ #+ #, #1 #% ## "AA

?itrogen dio/ide 5il mist mineral 5-one ;arathion3skin ;henol3skin ;horate 4Thimet63skin ;hosgene hloride6 ;hosphine ;hosphoric acid ;hosphorus 4yellow6 ;hosphorus chloride ;hosphorus trichloride ;icric acid3skin ;yridine &ilans tetrahydride6 4silicon penta3 4 arbonyl

* 3 A." 3 + 3 A." A.* 3 3 A." A.9 3 + + 3 +A 9 "AAA 3 3 "AA 9 A.9 +A 3 + 3

, + A.9 A." "# A.A+ A.$ A.$ " A." " ".+ A." "+ 1 9 9"+ + ,AAA " A." *1+ # 9.+ 91A A.9 "A +

+ 3 A.* 3 a A.9 3 " 3 3 3 A.+ 3 3 3 3 "AA + 3 3 3 "+A 3 3 9AA 3 3 3

"A "A A., 3 a 3 3 " * 3 3 * A.* 3 3 3 $9+ "A 3 3 3 +,A 3 3 "A%A A., 3 3

"A" &odium hydro/ide3 "A9 &tyrene, 4phanylethlene6 monomer

"A* &ulphur dio/ide "A$ &ulphur he/afluoride "A+ &ulphuric acid "A, Tetraethyl lead 4as ;b6 3 &kin

"A1 Toluene 4Toluol6 "A% 53Toluidine3skin 4&. .6 "A# Tributylphosohate ""A Trichloroethylene """ :ranium natural 4as :6 ""9 =inyl hloride 4H. .6 ""* .elding fumes

""$ Uylene 453m3;3isomers6 "AA ""+ Binc o/ide f d "", 4i6 Fume 4ii6 0ust 4Total dust6 Birconium 4as Br6 compounds d 3 3 3

$*+ a +.A "A.AA +

"+A a 3 3 3

,++ a "A 3 "A

TH0 THI.2 /%H026L0 @/ee /ections <; and ;GC LI/T ,9 7,TI9IA=L0 2I/0A/0/ ". Lead poisoning, including poisoning by any preparation or compound of lead or their se7uelae. 9. Lead tetra3ethyl poisoning *. ;hosphorus poisoning or its se7uelae. $. (ercury poisoning or its se7uelae. +. (anganese poisoning or its se7uelae. ,. Arsenic poisoning or its se7uelae. 1. ;oisoning by nitrous fumes. %. arbon disulphide poisoning. #. )en-ene poisoning, including poisoning by any of its homologues, their nitro or amido derivatives or its se7uelae. "A. hrome ulceration or its se7uelae.

"". Anthra/. "9. &ilicosis. "*. ;oisoning by halogens or halogen derivatives of the hydrocarbons of the aliphatic series.

"$. ;athological manifestations due to 4a6 radium or other radio3active substances. 4b6 U3rays. "+. ;rimary epitheliomatous cancer of skin. ",. To/ic anaemia. "1. To/ic 2aundice due to poisonous substances. "%. 5il acne or dermatitis due to mineral oils and compounds containing mineral oil base. "#. )yssionosis. 9A. Asbestosis. 9". 5ccupational or contract dermatitis caused by direct contract with chemicals and paints. These are of two types, that is primary irritants and allergic sensiti-ers. 99. ?oise induced hearing loss 4e/posure to high noise levels6. 9*. )eriyllium poisoning. 9$. 9+. arbon mono/ide oal minersF pnoumoconiosis.

9,. ;hosgene poisoning. 91. 5ccupational cancer. 9%. Isocyanates poisoning. 9#. To/ic nephirits.

%hild Labour A#rohibition 3 .egulationB Act, +;<:

In India, there are a number of Acts which prohibit the employment of children below "$ years and "+ years in certain specified employments. However, there is no procedure laid down in any

law for deciding in which employments, occupations or processes the employment of children should be prohibited. There is also no law to regulate the working conditions of children in most of the employments where they are not banned from working and are working under e/tremely shady and 7uestionable conditions. ,bjectives of %hild Labour A#rohibition 3 .egulationB Act, +;<: 4i6 4ii6 )an the employment of children, i.e. those who have not completed their fourteenth year, in specified occupations and processesI Lay down a procedure to decide modifications to the &chedule of banned occupations or processesI 4iii6 Regulate the conditions of work of children in employments where they are not prohibited from workingI 4iv6 Lay down enhanced penalties for employment of children in violation of the provisions of this Act, and other Acts which forbid the employment of childrenI 4v6 To obtain uniformity in the definition of FchildF in the related laws.

/che e of the Act The Act consists of 9, &ections and " &chedule with 9 ;arts. ". ;art A consists of list of occupations where child labour is banned. 9. ;art ) consists of list of processes where child labour is banned. I portant #rovisions of the Act (ho is a child) According to the definition given uEs 94ii6 of the Act, a child means a person who has not completed his fourteenth year of age. (here is the child labour prohibited to work) ?o child is permitted to work in any the occupations set forth in ;art A of the &chedule or any workshop wherein any of the processes set forth in ;art ) of the &chedule is carried on. 4&ection *6 0Fe ption8 The above prohibition does not apply to any workshop wherein any process is carried on by the occupier with the aid of his family or to any school established by, or receiving assistance or recognition from, @overnment.

(here child labour is per itted) '/cept the prohibitory occupations set forth in ;art A or processes set forth in ;art ) of the &chedule, child labour is permitted to be employed but the conditions of their work is re7uired to be regulated in accordance with ;art III of the Act. .esponsibilities of e ployers towards child labour8 ;lease refer to the note regarding the responsibilities of the employer for the proper implementation of the Act and the Rules. #enalties8 For the contravention of &ection * a person is punishable with not less than three months imprisonment which may e/tend to one year or with fine not less than Rs."A,AAAE3 rupees which may be e/tended up to Rs. 9A,AAAE3 or with both. For other offence, the punishment may be simple imprisonment up to one month or with fine up to Rs. "A,AAAE3 of both. A conviction uEs ,1 of the Factories Act, "#$% or uEs 9" of the (otor Transport .orkers Act, "#," will attract the penalties under the hild Labour 4;rohibition G Regulation6 Act, "#%,. /alient 9eatures of Legislative #rovisions #rohibiting and .egulating 0 ploy ent of %hildren ". As per the hild Labour 4;rohibition G Regulation6 Act, "#%, CchildD means a person who has not completed is "$th year of age. 9. The Act prohibits employment of children in "* occupations and +1 processes contained in ;art A G ) of the &chedule to the Act 4&ection *6. *. :nder the Act, a Technical Advisory ommittee is constituted to advice for inclusion of

further occupations G processes in the &chedule. $. The Act regulates the condition of employment in all occupations and processes not prohibited under the Act 4;art III6. +. Any person who employs any child in contravention of the provisions of &ection * of the Act is liable for punishment with imprisonment for a term which shall not be less than three months but which may e/tend to one year or with fine which shall not be less than Rs "A,AAA but which may e/tend to Rs 9A,AAA or both 4&ection "$6. ,. The entral and the &tate @overnments enforce the provisions of the Act in their

respective spheres. 0 ploy ent of children as do estic servants and in dhabas banned fro ,ctober $GG:8

The government has decided to prohibit employment of children as domestic servants or servants or in dhabas 4roadside eateries6, restaurants, hotels, motels, teashops, resorts, spas or in other recreational centres. The ban has been imposed under the hild Labour 4;rohibition G Regulation6 Act, "#%, and will be effective from "Ath 5ctober 9AA,. The (inistry of Labour has recently issued a notification to this effect giving three3month mandatory notice. The (inistry has warned that anyone employing children in these categories would be liable to prosecution and other panel action under the Act. It may be recalled that the government servants have already been prohibited from employing children as domestic servants. )y issuing this notification, the @overnment has imposed these restrictions on everyone. The decision has been taken on the recommendation of the Technical Advisory hild Labour headed by the 0irector @eneral, I (R. The ommittee on

ommittee considers the occupations hild

mentioned in the above notification as ha-ardous for children and has recommended their inclusion in the occupations which are prohibited for persons below "$ years under the Labour 4;rohibition G Regulation6 Act, "#%,. The ommittee while recommending a ban on

employing children in these occupations had said that these children are sub2ected to physical violence, psychological traumas and at times even se/ual abuse. It said that invariably such incidents go unnoticed and unreported as they take place in the close confines of the households or dhabas or restaurants. It said that these children are made to work for long hours and are made to undertake various ha-ardous activities severely affecting their health and psyche. The ommittee has said that the children employed in road3side eateries and highway dhabas were the most vulnerable lot and were easy prey to se/ and drug abuse as they came in contact with all kinds of people. The measure is e/pected to go a long way in ameliorating the condition of hapless working children. The Labour (inistry is also contemplating to strengthen and e/pand its rehabilitative &cheme of ?ational endemic districts in the country. TH0 /%H026L0 #A.T A ,%%6#ATI,7/ Any occupation connected with 3 4"6 Transport of passengers, goods or mails by railwayI 496 inder picking, clearing of an ash pit or building operation in the railway premisesI hild Labour ;ro2ect, which already covers 9+A child labour

4*6 .ork in a catering establishment at a railway station, involving the movement of a vendor or any other employee of the establishment from one platform to another or into or out of a moving trainI 4$6 .ork relating to the construction of a railway station or with any other work where such work is done in close pro/imity to or between the railway linesI 4+6 A port authority within the limits of any port. 4,6 .ork relating to selling of crackers and fireworks in shops with temporary licences. 416 AbattoirsEslaughter Houses. #A.T = #.,%0//0/ 4"6 )idi3making. 496 arpet3weaving. 4*6 ement manufacture, including bagging of cement. 4$6 loth printing, dyeing and weaving. 4+6 (anufacture of matches, e/plosives and fire3works. 4,6 (ica3cutting and splitting. 416 &hellac manufacture. 4%6 &oap manufacture. 4#6 Tanning. 4"A6 .ool3cleaning. 4""6 )uilding and construction industry. 4"96 (anufacture of slate pencils 4including packing6.

4"*6 (anufacture of products from agate. 4"$6 (anufacturing processes using to/ic metals and substances, such as, lead, mercury, manganese, chromium, cadmium, ben-ene, pesticides and asbestos. 4"+6 JHa-ardous processesJ as defined in &ec. 9 4cb6 and dangerous operations as defined in rules made under &ec. %1 of the Factories Act, "#$% 4,* of "#$%6. 4",6 ;rinting as defined in &ec. 94k6 4iv6 of the Factories Act. "#$% 4,* of "#$%6. 4"16 ashew and cashew nut decaling and processing. 4"%6 &oldering processes in electronic industries.

=onded Labour /yste

AAbolitionB Act, +;H:

,bjective8 The ob2ect of the Act is to provide for the abolition of bonded labour system with a view to preventing the economic and physical e/ploitation of the weaker &ections of the people and for matters connected therewith or incidental thereto. /che e of the Act The Act consists of 91 &ections with some of the important &ections listed below! 9 * $ + , 1 % # "A "" "9 "* "$ "+ ", 0efinitions Act to Have 5verriding 'ffect Abolition of )onded Labour &ystem Agreement, ustom, 'tc., to be =oid Liability to Repay )onded debt to &tand '/tinguished ;roperty of )onded Labourer to be freed from (ortgage, 'tc. Freed )onded Labourer ?ot to be 'victed from Homestead, etc. reditor not to Accept ;ayment Against '/tinguished 0ebt Authorities .ho may be &pecified for Implementing the ;rovisions of this Act 0uty of 0istrict (agistrate and other officers to ensure credit 0uty of 0istrict (agistrate and 5fficers Authorised by Him =igilance ommittee Functions of =igilance ommittee )urden of ;roof ;unishment for 'nforcement of )onded Labour

"1 "% "# 9A 9" 99 9* 9$ 9+ /yste

;unishment for Advancement of )onded 0ebt ;unishment for '/tracting )onded Labour under the )onded Labour &ystem ;unishment for 5mission or Failure to restore possession of ;roperty to )onded Labourers Abetment to be an 5ffence 5ffences to be Tried by '/ecutive (agistrates ogni-ance of 5ffences 5ffences by ompanies ;rotection of Action Taken in @ood Faith >urisdiction of ivil ourts )arred

of =onded Labour and its for s ! It is outcome of customary obligations, forced labour,

beggar or indebtedness under which a debtor agrees to render service. In different parts of the country, it was known by the different names such as Adiyamar, baramasia, basahya, bethu, bhagela, cherumar, garru3galu hari, harwai, holya, 2ana 2eetha, kamiya, khundit3mundit, kuthia, lakhari, mun2hi, mat, munish system, nit3ma2door, paleru, paduyal, pannayilal, sagri, san2i, san2awat, sewak, sewakia, seri, vetti. (ho is bonded Labour) According to the definition given in &ection 94g6 of the Act, bonded labour means service arising out of loanEdebtEadvance. It represents the relationship between a creditor and a debtor wherein the debtor undertakes to mortgage his services or the services of any of his family members to the creditor for a specified or unspecified period with or without wages accompanied by denial of choice of alternative avenues of employment, or to deny him freedom of movements, then the person would normally be covered under the definition of a bonded labour. (ho to approach in case of bondage) The aggrieved person or any person on his behalf ommittee constitute

can approach to the 0istrict (agistrate who is chairman of the =igilance

under the Act and has been entrusted with certain duties and responsibilities for implementing the provisions of the Act. (atter can also be brought to the notice of the &ub 0ivisional (agistrate of the area or any other person who is a member of the =igilance division. .elief available to the victi ! The bonded labour is to be immediately released from the bondage. His liability to repay bonded debt is deemed to have been e/tinguished. Freed bonded labour shall not be evicted from his homesteads or other residential premises which he was ommittee of 0istrict or &ub3

occupying as part of consideration for the bonded labour. A rehabilitation grant of Rs. "9A,AAAE3 to each of the bonded labour is to be granted and assistance for his rehabilitation provided. #enalties8 The offence under the Act is cogni-able and bailable any person who is contravenes provisions of the act is punishable with imprisonment for a term which may e/tend to three years and also with a fine which may e/tend to two thousand rupees. ..e.f. ".+.9AAA 4Rs. $AAAE3 from "#1%, Rs. ,9+AE3 w.e.f. ".9.%, G Rs. "A,AAAE3 w.e.f. ".$.#+6

The 0 ploy ent 0Fchanges A%o pulsory 7otification of -acanciesB Act, +;*;
The main purpose of the Act is to provide for the compulsory notification of vacancies to employment e/changes. The employer is re7uired on a compulsory basis, to notify to the 'mployment '/changes all vacancies other than vacancies in unskilled categories, temporary vacancies and vacancies proposed to be filled through promotion and tender to the 'mployment '/changes, return relating to the staff strengths at regular intervals. The Act e/tends to the whole of India. /che e of the Act There are only "A &ections in total and some of the important &ections are! &ection 9 &ection * &ection $ &ection + &ection , &ection 1 &ection % &ection # 0efinitions Act not to apply in relation to certain =acancies ?otification of =acancies to 'mployment '/changes 'mployers to furnish information and returns in prescribed form Right of access to records or documents ;enalties ogni-ance of 5ffences ;rotection of Action taken in good faith

Application of the Act! The Act covers the employers in establishments both in public and private sectors. The Act is applicable to establishments which are engaged in non3agricultural activities and employing 9+ or more workers. The enforcement of the Act is the responsibility of &tates and :nion Territories. (ost of the &tatesE:nion Territories have set up special enforcement machinery for this purpose. Act not to apply in relation to certain vacancies! The Act shall apply to the following category of vacancies! "6 In any employment in agriculture 4including horticulture6 in establishment in private sector other than employment as agricultural or farm machinery operativesI 96 In any employment in domestic serviceI *6 In any employment the total duration of which is less than * monthsI $6 In any employment which re7uires unskilled office workI +6 In any employment related to the staff of ;arliament. In addition, the Act shall not apply to the following vacancies unless the otherwise directs through notification in its 5fficial @a-ette! "6 =acancies which are proposed to be filled through promotion 96 =acancies which are proposed to filled through absorption of surplus staff of any branch or department of the same establishment *6 =acancies which are proposed to be filled through the result of any e/amination conducted or interview held by, or on recommendation of, any independent agency such as :nion or &tate ;ublic &ervice ommission and the like. $6 =acancies in an employment which carries a remuneration of less than si/ty rupees in a month. 4&ection *6. 7otification of vacancies to 0 ploy ent 0Fchanges ! &ection $ of the Act provides for notification of vacancies to employment e/change. The employer in every establishment in public sector is re7uired to notify any vacancy before filling it up, to the prescribed employment e/changes. entral @overnment

The &ection further re7uires an employer in every establishment tin private sector or every establishment pertaining to any class or category of establishments in private sector to notify to the prescribed employment e/changes from such date as may be specified in the notification issued by the appropriate @overnment in the 5fficial @a-ette. &ection $4*6 provides that the manner of notification of vacancies and the particulars of employments having such vacancies should be such as may be prescribed. &ection $4$6 says that the employer8s obligation is only to notify the vacancy to the employment e/change. The Act does not impose any obligation on an employer to recruit any person through employment e/change to fill the vacancy merely because the vacancy has been notified as re7uired by this Act. 0 ploy ent 0Fchanges to which vacancies are to be notified ! Rule * of The 'mployment '/changes 4 ompulsory ?otification of =acancies6 Rules, "#,A, says that the vacancies are to be notified either to the 'mployment '/change, as the case may be. The entral 'mployment '/change means the 'mployment '/change established by the entral 'mployment '/change or Local

@overnment of India, (inistry of Labour and 'mployment and to which the following vacancies shall be notified! =acancies in posts of a technical and scientific nature carrying a basic pay of Rs. ",$AA or more per month occurring in establishments in respect of which the @overnment is the appropriate @overnment under the AcctI and =acancies which an employer may desire to be circulated to the employment e/changes outside the &tate or :nion Territory to which the establishment is situated. The Local 'mployment '/change means the employment e/change 4the entral 'mployment entral

'/change6 notified in the 5fficial @a-ette by the &tate @overnment or the Administration or :nion Territory as having 2urisdiction over the area in which the establishment concerned is situated or over specified classes or categories of establishments of vacancies. =acancies of all types other than those which are re7uired to be notified to '/change, shall be notified to these local employment e/changes. 9urnishing of Infor ation or .eturns! entral 'mployment

&ection + re7uires an employer in every establishment in public sector to furnish, such information or return as may be prescribed in relation to vacancies that have occurred or are about to occur in the establishment to such employment e/changes as may be prescribed. In the case of private sector or every establishment pertaining to any class or category of establishments in private sector, the appropriate @overnment, by notification in the 5fficial @a-ette, may re7uire that from such date as may be prescribed in relation to vacancies that have occurred or are about to occur in that establishment to such employment e/changes as may be prescribed and the employer shall thereupon, comply with such re7uisition. The above return shall be furnished to the 0irector or other authori-ed officer of the 0irectorate administering employment e/changes in a &tate or :nion Territory. .ight of Access to .ecords or 2ocu ents! &uch officer of the @overnment as may be prescribed in this behalf, or nay person authori-ed by him in writing, shall have access to any relevant record or document in the possession of any employer re7uired to furnish any information or returns under &ection + of this Act. &uch officer is also empowered to enter at any reasonable time, any premises where he believes that such record or document to be and inspect and take copies of relevant records or documents or ask any 7uestion necessary for obtaining information re7uired under that &ection 4&ection ,6. #enalties A/ection HB 4"6 If any employer fails to notify to the employment e/changes prescribed for the purpose any vacancy in contravention of sub3&ection 4"6 or sub3&ection 496 of &ection $, he shall be punishable for the first offence with fine which may e/tend to five hundred rupees and for every subse7uent offence with fine which may e/tend to one thousand rupees. 496 If any person 3 4a6 re7uired to furnish any information or return 3 4i6 refuses or neglects to furnish such information or return, or 4ii6 furnishes or causes to be furnished any information or return which he knows to be false, or 4iii6 refuses to answer, or gives a false answer to, any 7uestion necessary for obtaining any information re7uired to be furnished under &ection +I or 4b6 impedes the right of access to relevant records or documents or the right of entry conferred by &ection ,, he shall be punishable for the first offence with fine which may e/tend to two hundred

and fifty rupees and for every subse7uent offence with fine which may e/tend to five hundred rupees. %ogni>ance of ,ffences 5 ?o prosecution for an offence under this Act shall be instituted e/cept by, or with the sanction of, such officer of @overnment as may be prescribed in this behalf or any person authorised by that officer in writing 4&ection %6. #rotection of action taken in good faith 5 ?o suit, prosecution or other legal proceedings shall lie against any person for anything which is in good faith done or intended to be done under this Act 4&ection #6.

Apprentices Act, +;:+

The main purpose of the Act is to provide practical training to technically 7ualified persons in various trades. The ob2ective is promotion of new skilled manpower. The scheme is also e/tended to engineers and diploma holders. The Act applies to areas and industries as notified by entral government. Q&ection "4$6L. /che e of the Act There are *% &ections in total and " &chedule. This &chedule is about modifications in the .orkmen8s Act, "#,". Obligation of Employ r ! 'very employer is under obligation to provide the apprentice with the training in his trade in accordance with the provisions of this Act and the rules made there under. If the employer is not himself 7ualified in the trade, he has to ensure that a person who possesses the prescribed 7ualification is placed in charge of the training of the apprentice. 'very employer has to provide ade7uate instructional staff, possessing such 7ualifications as may be prescribed for imparting practical and theoretical training and facilities for trade test of apprenticesI and 'very employer is under obligation to take apprentices in prescribed ratio of the skilled workers in his employment in different trades. Q&ection ""L. ompensation Act, "#9* w.r.t its application to apprentices under the Apprentices

In every trade, there will be reserved places for scheduled castes and schedules tribes. Q&ection *AL. Ratio of trade apprentices to workers shall be determined by @overnment. entral

'mployer can engage more number of apprentices than prescribed minimum. Q&ection %4"6L.

The employer has to make arrangements for practical training of apprentice Q&ection #4"6L.

'mployer will pay stipends to apprentices at prescribed rates. If the employees are less than 9+A, +AV of cost is shared by @overnment. If employer is employing more than 9+A workers, he has to bear full cost of training.

,bligations of Apprentices! 'very trade apprentice undergoing apprenticeship training shall have the following obligations, namely! To learn his trade conscientiously and diligently and endeavour to 7ualify himself as a skilled craftsman before the e/piry of the period of trainingI To attend practical and instructional classes regularlyI To carry out all lawful orders of his employer and superiors in the establishmentsI and To carry out his obligations under the contract of apprenticeship.

In case of graduate or technician apprentice or technician 4vocational6 apprentice, apart from the aforestated obligations, the Act imposes further obligation to learn his sub2ect in 'ngineering or Technology or =ocational ourse. 4&ection "96 (ho can be an Apprentice 3 Apprentice should be of minimum age of "$ years and he should satisfy the standard of education and physical fitness as prescribed. Q&ection *L. .eservation of training places for scheduled castes! &ection *A provides that in every designated trade, training places shall be reserved by the employer for the &cheduled Article *,, of the astes and &cheduled Tribes 4as defined in clauses 49$6 and 49+6 of onstitution6 and where there is more than one designated trade in an

establishment, such training places shall be reserved on the basis on the total number of apprentices in all the designated trades in such establishment. The reservation shall be such as may be prescribed having regard to the population of the &cheduled Tribes in the &tate concerned. 2uration of Training 3 0uration of training period and ratio of apprentices to skilled workers for different trades has been prescribed in Apprenticeship Rules, "##". 0uration of Apprenticeship may be from , months to $ years depending on the trade, as prescribed in Rules. ;eriod of training is determined by ?ational @overnment of India634&ection ,6. %ontract with Apprentice K Apprentice appointed has to e/ecute a contract of apprenticeship with employer. The contract has to be registered with Apprenticeship Adviser. If apprentice is minor, agreement should be signed by his guardian. Q&ection $4"6L Apprentice is entitled to casual leave of "9 days, medical leave of "+ days and e/traordinary leave of "A days in a year. 2ate of co ence ent of apprenticeship training ! ouncil for training in =ocational Trades 4established by astes and &cheduled

The apprenticeship training shall be deemed to have commenced on the date on which the contract of apprenticeship has been entered into. .egistration! The employer shall send the contract to the Apprenticeship adviser for registration within three months of the date on which it was signed 4Rule ,6. The contract shall be registered by the Apprenticeship Adviser on being satisfied that the person described as an apprentice in the said contract is 7ualified under this Act. Registration of contract of apprenticeship under &ection $4$6 is not a necessary ingredient of definition of apprentice. 4)haskaran v. O&') 4"#%,6 " LL? %,#6. Ter s and conditions of contract! The contract may contain such terms and conditions as may be agreed to by the parties to the contract. In case, the entral @overnment after consulting the entral Apprenticeship ouncil makes any rule varying the terms and conditions of apprenticeship training of any category of apprentices undergoing such training then the terms and conditions of every contract relating to that category of apprentices and subsisting immediately before the making of such rule shall be deemed to have been modified accordingly.

7ovation of contract of apprenticeship! .here an employer is for any reason unable to fulfill his obligations under the contract and with approval of the Apprenticeship Adviser it is agreed between the employer, the apprentice or his guardian and any other employer that the apprentice shall be engaged as an apprentice under the other employer for the une/pired portion of the period of apprenticeship training, the agreement, on registration with the Apprenticeship Adviser shall be deemed to be the contract of apprenticeship between the apprentice or his guardian and other employer. &uch contract on and from the date of such registration shall be terminated with the first employer and no obligation under that contract shall be enforceable 4&ection +6. #ay ent to apprentices! This is a contractual as well as statutory obligation imposed under &ection "* of the Act that an employer pays to every apprentice during the period of training such stipend at a rate not less than the prescribed minimum rate and this rate will be specified in the contract. An employer shall pay such stipend at such intervals and sub2ect to such conditions as may be prescribed. However, an apprentice shall not be paid on the basis of piece3work nor he shall take part in any output bonus or other incentive scheme. Ter ination of contract! The contract of apprenticeship training shall terminate on the e/piry of the period of apprenticeship training. 'ither party can make application for termination of contract to the Apprenticeship Adviser and thereafter send a copy of the same to the other party, who on being satisfied that the parties have failed to carry out the terms and conditions of the contract and it is desirable in the interests of the parties or any of them to terminate the contract, shall register the same. However, the employer shall pay the prescribed amount of compensation to the apprentice where the contract is terminated for failure on the part of the employer to honour the contract. .here the contract is terminated for failure on the part of the apprentice, he or his guardian shall refund the cost of the training to the employer. 4&ection 16 Legal #osition of Apprentices " An apprentice is not a workman during apprentice training. Q&ection "%L ;rovisions of labour law like )onus, ;F, '&I. Act, gratuity, Industrial 0isputes Act etc. are not applicable to him. However, provisions of Factories Act regarding health, safety and welfare will apply to him. Apprentice is also entitled to get compensation from employer for employment in2ury. Q&ection ",L.

An employer is under no obligation to employ the apprentice after completion of apprenticeship. Q&ection 994"6L. However, in UP State Road Transport Corpn v. UP Parivahan Nigam Shishukh Berozgar Sangh AIR "##+ & """$ T 4"##+6 9 & " , it was held that other things being e7ual, a trained apprentice should be given preference over direct recruits. It was also held that he need not be sponsored by the employment e/change. Age bar may also be rela/ed, to the e/tent of training period. The concerned institute should maintain a list of persons already trained and in between trained apprentices, preference should be given to those who are senior. K same view in UP Rajya Vidyut Parishad v. State of UP 9AAA LLR %,# 4& 6. /tipend payable" The minimum rate of stipend payable per month is as follows 3 4a6 'ngineering graduates 3 Rs ",#1A p.m. for post3institutional training 4b6 &andwich course students for degree e/amination 3 Rs ",$AA p.m. 4c6 diploma holders 3 Rs ",$AA p.m. for post3institutional training 4d6 &andwich course students for degree e/amination 3 Rs ","$A p.m. 4e6 =ocational certificate holder 3 Rs ",A#A p.m. Qw.e.f. (ay 9AA"L In case of $ year training, the stipend is as follows K first year K Rs %9A pm. &econd year K Rs #$A pm. Third year K Rs ",A#A pm. Fourth year K Rs ",9*A pm. QFrom (ay 9AA"L. Test and #roficiency certificate " 5n completion of training, every trade apprentice has to appear for a test conducted by ?ational ouncil. If he passes, he gets a certificate of proficiency. Apprenticeship Adviser " @overnment is empowered to appoint Apprenticeship Adviser, 0y Apprenticeship Adviser etc. to supervise the scheme. =arious powers have been conferred on them under the Act. 2isputes under contract and settle ent thereof! &ection 9A of the Act provides that if out of the terms and conditions of the contract any dispute arises, it will be referred to Apprenticeship Adviser for decision. An appeal can be preferred by the aggrieved party within *A days of the communication of the Adviser8s decision to the Apprenticeship ouncil and such appeal shall be heard and determined by the ommittee of that ouncil appointed for the purpose, and such decision of the ommittee shall be final.

Holding of Test and Grant of %ertificate and %onclusion of Training A/ection $+B 3 4"6 'very trade apprentice who has completed the period of training shall appear for a test to be conducted by the ?ational ouncil to determine his proficiency in the designated trade in which he has undergone his apprenticeship training.

496 'very trade apprentice who passes the test referred to in sub3&ection 4"6 shall be granted a certificate of proficiency in the trade by the ?ational ouncil. 4*6 The progress in apprenticeship training of every graduate or technician apprentice, technician 4vocational6 apprentice shall be assessed by the employer from time to time. 4$6 'very graduate or technician apprentice or technician 4vocational6 apprentice, who completes his apprenticeship training to the satisfaction of the concerned Regional )oard, shall be granted a certificate of proficiency by that )oard. ,ffer and Acceptance of 0 ploy ent A/ection $$B 5 4"6 It shall not be obligatory on the part of the employer to offer any employment to any apprentice who has completed the period of his apprenticeship training in his establishment, nor shall it be obligatory on the part of the apprentice to accept an employment under the employer. 496 ?otwithstanding anything in sub3&ection 4"6, where there is a condition in a contract of apprenticeship shall, after the successful completion of the apprenticeship training, serve the employer, the employer shall, on such completion, be bound to offer suitable employment to the apprentice, and the apprentice shall be bound to serve the employer in that capacity for such period and on such remuneration as may be specified in the contract! ;rovided that where such period or remuneration is not, in the opinion of the Apprenticeship Adviser, reasonable, he may revise such period or remuneration so as to make it reasonable, and the period or remuneration so revised shall be deemed to be the period or remuneration agreed to between the apprentice and the employer. ,ffences And #enalties A/ection &GB 5 4"6 If any employer 3 4a6 engages as an apprentice a person who is not 7ualified for being so engaged, or 4b6 fails to carry out the terms and conditions of a contract of apprenticeship, or 4c6 contravenes the provisions of this Act relating to the number of apprentices which he is re7uired to engage under those provisions, he shall be punishable with imprisonment for a term which may e/tend to si/ months or with fine or with both. 496 If any employer or any other person 3 4a6 re7uired to furnish any information or return 3 4i6 refuses or neglects to furnish such information or return, or

4ii6 furnishes or causes to be furnished any information or return which is false and which he either knows or believes to be false or does not believe to be true, or 4iii6 refuses to answer, or gives a false answer to any 7uestion necessary for obtaining any information re7uired to be furnished by him, or 4b6 refuses or willfully neglects to afford the the entral or the &tate Apprenticeship Adviser or such

other person, not below the rank of an Assistant Apprenticeship Adviser, as may be authorised by entral or the &tate Apprenticeship Adviser in writing in this behalf any reasonable facility for making any entry, inspection, e/amination or in7uiry authorised by or under this Act, or 4c6 re7uires an apprentice to work overtime without the approval of the Apprenticeship Adviser, or 4d6 employs an apprentice on any work which is not connected with his training, or 4e6 makes payment to an apprentice on the basis of piecework, or 4f6 re7uires an apprentice to take part in any output bonus or incentive scheme, he shall be puni#$abl %it$ impri#onm nt for a t rm %$ic$ may &t nd to #i& mont$# or %it$ fin or %it$ bot$. #enalty where no specific penalty is specified A/ection &+B 5 If any employer or any other person contravenes any provision of this Act for which no punishment is provided in &ection *A, he shall be punishable with fine which shall not be less than one thousand rupees but may e/tend to three thousand rupees.

,ffences by %o panies A/ection &$B 5 4"6 If the person committing an offence under this Act is a company, every person who, at the time the offence was committed was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall be deemed to be guilty of the offence and shall be liable to be proceeded against and punished accordingly! ;rovided that nothing contained in this sub3&ection shall render any such person liable to such punishment provided in this Act if he proves that the offence was committed without his knowledge or that he e/ercised all due diligence to prevent the commission of such offence. 496 ?otwithstanding anything contained in sub3&ection 4"6, where an offence under this Act has been committed by a company and it is proved that the offence has been committed with the

consent or connivance of, or is attributable to any negligence on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary, or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly. '/planation! For the purposes of this &ection, 3 4a6 JcompanyJ means a body corporate and includes a firm or other association of individualsI and 4b6 JdirectorJ in relation to a firm means a partner in the firm. %ogni>ance of ,ffences A/ection &&B 5 ?o court shall take cogni-ance of any offence under this Act or the rules made there under e/cept on a complaint thereof in writing made by the Apprenticeship Adviser or the officer of the rank of 0eputy Apprenticeship Adviser and above within si/ months from the date on which the offence is alleged to have been committed.

0 ployees #rovident 9und and Discellaneous #rovisions Act, +;*$

,bjectives W W W W W W W To make provisions for the future of the industrial worker after he retires or for his dependents in the case of his early death. ompulsory ;rovident Fund Family ;ension 0eposit linked insurance Application to factories and establishments employing 9A or more persons. an be made applicable by central government to establishments employing less than 9A persons or if the ma2ority of employees agree. '/cludes establishments employing +A or more persons or 9A or more persons but less than +A persons, until the e/piry of three years in the case of the former, and five years in the case of the former, and five years in the case of the latter, from the date of setting up of establishment. W Applicable to all persons who are employed directly or indirectly through contractors in any kind of work. 0ligibility W 'mployees drawing pay not e/ceeding Rs. ,,+AAE3 per month. The 'mployees8 ;rovident Funds &chemes, "#+9I The 'mployees8 ;ension &cheme, "##+ and /che es fra ed under the Act

/cope and coverage

 W W W W W W W W

The 'mployees8 0eposit Linked Insurance &cheme, "#1, Apart from terminal disbursal of non3refundable withdrawals for Life Insurance ;olicies House building (edical treatment (arriage Higher education Family pension Retirement3cum3withdrawal benefits 0eposit linked insurance Amount e7ual to the average balance in ;rovident Fund of deceased sub2ect to a ma/imum of Rs. ,+,AAAE 3

=enefits

As per ;reamble to the Act, the ';F Act is enacted to provide for the institution of provident funds, pension fund and deposit lined insurance fund for employees in factories and other establishments. The 'mployees8 ;rovident Funds and (iscellaneous ;rovisions Act is a social security legislation to provide for provident fund, family pension and insurance to employees. 'mployee has to pay contribution towards the fund. 'mployer also pays e7ual contribution. The employee gets a lump sum amount when he retires, which will be useful to him after retirement. The Act covers three schemes i.e. ;F 4;rovident Fund scheme6, F;F 4Family ;ension Fund scheme6 and '0LI 4'mployees 0eposit Linked Insurance scheme6. The ';F Act contains basic provisions in respect of applicability, eligibility, damages, appeals, recovery etc. The three schemes formed by in respect of those schemes. Applicability of the Act 5 The Act applies to 4a6 'very establishment which is a factory engaged in industry specified in &chedule I to the Act and in which 9A or more persons are employed and 4b6 any other establishment or class of establishment employing 9A or more persons which may be specified by Q&ection "4*6L. In RPFC v. T S ariharan "#1" Lab I #+" 4& 6, it was held that temporary workers should not entral government by notification in official ga-ette. 3 3 entral @overnment can also apply provisions of the Act to any establishment even if it employs less than 9A persons. entral @overnment under the Act make provisions

be counted to decide whether the Act would apply. 'ven if the provisions of ;F Act are not applicable in a particular establishment, if employer and ma2ority of employees agree, the entral ;rovident Fund ommissioner can apply the provisions to that establishment by issuing a notification in 5fficial @a-ette. Q&ection "4$6L. 5nce the

provisions of Act become applicable, it continues to be applicable even if number of employees fall below 9A. Q&ection "4+6L. Co' rag of Act ! The Act has been e/tended to R Factories R (ines other than coal mines R Hotels and restaurants R ;lantation of tea, coffee, rubber QTea factories in Assam have been e/cluded vide para "4*64a6 of ';F &chemeL R Trading and commercial establishments engaged in purchase, sale or storage of goods R 'stablishments of e/porters, importers, advertisers, stock e/changes R anteens R 'stablishments of Attorneys, A, I .As, 'ngineers and ontractors, architects and medical practitioners R Hospitals R Travel agencies R )anks doing business only in one &tate R @eneral Insurance R '/pert services R lubs and societies rendering services to their members R Agricultural farms R Financial 'stablishments other than banks R )uilding and construction Industry R ;oultry farming R :niversity, college or schools. 3 3 The Act has been e/tended w.e.f. ".$.9AA" vide notification dated 99.*.9AA", to R courier services R Aircraft or airlines other than aircraft or airline owned or controlled by @overnment R 'stablishment engaged in rendering cleaning and sweeping services. 5nce an establishment is covered under ;F, all its departments and branches wherever they are situated are also covered. ,ther 7on59actory 0stablish ents %overed 3 )esides factories, other establishments employing 9A or more persons can be covered under the Act uEs "4*64b6. =arious notifications have been issued e/tending the provisions of ;F Act to non3factory establishments. &ome ma2or among them are 3 plantation, mines, coffee, hotels and restaurants, cinema and theatres, trading and commercial establishments, laundry, canteens, establishments of attorneysE AE I .AEengineersE architectsEmedical practitioners, hospitals, financial establishments 4other than IF I, :TI, I0)I, &F 6, building and construction industry, poultry, university, college, schools, scientific institutions etc. Transitory #rovisions when Act is eFtended 5 It is possible that when ;F Act is e/tended to certain establishment, some ;F scheme may be already in e/istence. &uch scheme will continue and the balance amount in such scheme to credit of the employee will be transferred to the ;rovident Fund under statutory scheme of ;F Act. Q&ection "+L. E#tabli#$m nt to includ all d partm nt# and branc$ # 5 (here an establishment consists of different departments or has branches, whether situate in the same place or in different places, all such departments or branches shall be treated as parts of the same establishment. Q&ection 9AL. 3 3 Thus, if factory is covered, the head office and branches will also be covered under the Act.

Act not applicabl to c rtain #tabli#$m nt# 3 As per &ection ",4"6, the ;F Act does not apply to 4a6 any establishment registered under any establishment belonging to or under to any establishment set up under any ooperative &ocieties Act or &tate law relating to entral @overnment or a &tate @overnment cooperative societies, employing less than +A persons and working without paid of power 4b6 to ontrol of and whose employees are entitled to benefit of contributory provident fund or old age pension. 4c6 entral or &tate Act and whose employees are entitled to benefit of contributory provident fund or old age pension.. ($ r PF Act i# not applicabl ! The ;F Act is not applicable to certain establishmentsMR

Factories or establishments employing less than 9A employees. However, once Act becomes applicable, it continues to apply even if subse7uently, the number is lower than 9A R )anks doing business in more than one &tate R belonging to or under control of Assam R '/emption granted by entral @overnment by a special notification. "dministration of the Fund 5 =oth e ployer and e ployee have to pay contribution at prescribed rates" These a ounts are credited to a fund" The fund vests in and is ad inistered by %entral =oard" @/ection *A+ABC" Employ # co' r d und r t$ #c$ m 3 As per &ection 94f6, CemployeeD means any person oal mines R :nits established under ooperative &ocieties Act employing less than +A workers and working without aid of power R 5ther establishments entral @overnment or &tate @overnments and whose employees are entitled to benefits of contributory provident fund or pension. R Tea factories in

who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of an establishment, and who gets his wages directly or indirectly from the employer. It includes any person 3 4i6 employed by or through a contractor in or in connection with the work of the establishment 4ii6 engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, "#," or under the standing orders of the establishment. Thus, 4a6 ;ersons employed through contractor in connection with work of establishment are covered 4b6 Apprentices employed under Apprentices Act or under standing orders of establishment are e/cluded, i.e. they are not employees. QThe model standing orders merely state that an Papprentice8 is a learner who is paid an allowance during the period of his trainingL. Non"Eligibl mploy # und r PF ! R 'mployee whose Ppay8 is more than Rs. ,,+AA per month

are not eligible. 4It may be noted that limit of pay was Rs +,AAA upto *".+.9AA" and Rs. *,+AA upto *Ath &ept., #$6 R Apprentices as per certified standing orders or under Apprentices Act R

asual employees. However, employees employed through contractors have also to be covered under ;F. Employ to b com m mb r of Fund imm diat ly on )oining # 'very employee employed in

or in connection with work of a factory or establishment to which the Act applies is entitled and re7uired to become member of ;rovident Fund, unless he is an e/cluded employee. Qpara 9,4"6 of ';F &chemeL. An employee who is drawing Ppay8 above prescribed limit 4presently Rs ,,+AA6 can become member with permission of Assistant ;F agree. Qpara 9,4,6 of ';F &chemeL. Contribution by mploy r and mploy 3 As per &ection 94c6 CcontributionD means a ommissioner, if he and his employer

contribution payable in respect of a member under a &cheme or the contribution payable in respect of an employee to whom the Insurance &cheme applies. As per &ection ,, contribution shall be paid by employer X "AV of basic wages plus dearness allowance plus retaining allowance. This amount is defined as Ppay8 as per e/planation to para 94f64ii6 of ';F &cheme. '7ual contribution is payable by employee also. This contribution can be increased to "9V by &eptember 99, "##1. A person who is already a member continues to be a Pmember8 even if his Ppay8 e/ceeds Rs ,,+AA. However, the contribution is limited to Rs ,,+AA only. Qpara 9,A496 of ';F &chemeL. RPFC i# liabl und r Con#um r Prot ction Act 3 The Regional ;rovident Fund is providing service under the Act and hence he is liable under v. Shiv $umar %oshi 4"##,6 $ 9AAA & Employ **" T ## omp T> %A+ T "##, LLR ,$" 4? 0R ommissioner entral @overnment and in fact, has been increased to "9V w.e.f

onsumer ;rotection Act. 3 RPFC + member bench6 3 confirmed in

RPFC v. Shiv $umar %oshi "### AIR & . $$+, T "###416 & AL' $+* T 9AAA LLR 9"1 T AIR as *$1 T 49AAA6 LA3)L &upp 9, T 9$ & L $, 4& 6.

# Pro'id nt Fund Sc$ m 3 This is the main scheme under the Act. )oth employer

and employee have to pay contribution to ;rovident Fund. The employer has to deduct contribution of employee from the salary of employee and has to pay both employees8 contribution as well as employer8s contribution by a challan in prescribed form. The amount has to be paid in approved bank. 0 ployee %an #ay Higher %ontribution 3 'mployee has to contribute "9E"AV of his FpayF as contribution. The employee can voluntarily pay higher contribution above the statutory rate. However, employer does not have to match the voluntary contribution, over and above the statutory rate. Qpara 9,496 of ';F &chemeL.

Contribution payabl und r PF Sc$ m ! The ;rincipal 'mployer is liable to pay contribution of his own employees as well as employees employed through contractor. ;rincipal 'mployer can recover from contractor the amount paid by him on behalf of contractor. The contribution is "9V of Ppay8 i.e. basic wages, plus dearness allowance, cash value of food concession and retaining allowance. &chemeL. 'mployer has to pay his contribution to ';F. He cannot deduct his contribution from wages of the employee. Q;ara *" of ';F &chemeL. However, he has to deduct employee8s share from his salary and pay the same in ';F scheme. This deduction can be only from the wages pertaining to period for which contribution is paid. However, if there is accidental omission, the amount can be recovered later. Amount deducted from salary of employees is held in trust by the employer or contractor. Q;ara *9 of ';F &chemeL. 5ut of employer8s contribution of "9E"AV, the 'mployer8s contribution of %.**V will be diverted to 'mployees8 ;ension &cheme. The balance will be retained in the ';F scheme. Thus, on retirement, the employee will get his full share plus the balance of 'mployer8s share retained to his credit in ';F account. QThis diversion is only w.e.f. ",th ?ovember, #+. 'arlier 'mployer8s contribution to their credit will continue to remain to their creditL. Lo% r contribution in c rtain ca# # ! The employerFs and employee8s contribution is "9V each. This is applicable to many of industries and establishments. However, this contribution is not applicable to 3 R any establishment employing less than 9A persons R any establishment registered with )oard for Industrial and Financial Reconstruction 4)IFR6 as a sick company 3 the lower rate of contribution continues till its net worth is positive R any other establishment which has accumulated loss e7ual to or more than its assets and has also suffered cash loss in last two years. R >ute industry R )eedi industry R )rick industry R oir industry other than the spinning sector R @uar gum factories. In these cases, the contribution is "AV. Int r #t on account K ;F ommissioner shall maintain account of each member of ';F ontribution of both employer and employee is same i.e. "9V each. Qpara 9# of ';F

scheme. Q;ara +# of &chemeL. Interest is credited to the account of employee. The Interest is calculated on monthly running balance basis. Amount standing to credit at end of the month is considered for calculation of interest for the following month. The interest rate is declared every year by entral @overnment in consultation with entral )oard of Trustees of ;rovident Fund. Q;ara ,A of ';F &chemeL. 0#9 for 0 ployees 9or 7ew 0ntrants!

0nrol ent! An employee is eligible for membership from the day he 2oins the covered establishment. If the employee8s emoluments e/ceed Rs. ,,+AAE3 per month, he has the option to 2oin the &cheme4s6 with the consent of employer. 0eclare previous employment details, if any, in Form ?o. "" to the employer. 5n becoming a member of the &chemes file details in Form ?o. 9 4 family particularsE nominations6 through the employer. Rate of contribution payable by a member shall be X "9V of his emoluments. A member can contribute statutorily over and above the prescribed rate.

9or 0Fisting De bers! 0nrol ent! Any change in the family status, such as, 3 (arriage of the member. Additions E deletion in the family. Legal adoption of the children. hange of nominee, is to be filed in Form ?o. 9 through the employer. In the event the member is holding a &cheme ertificate 4under ';&, #+6, he should

surrender the same to the concerned ';F5 office, through his employer. A member is entitled to various benefits G facilities such as withdrawals, advances, pensions, death insurance etc. 0 ployeesI #ension /che e 5 This scheme has been introduced w.e.f. ",th ?ovember, #+. The &cheme is applicable to all subscribers of 'mployers8 ;rovident Fund. It is also compulsory to persons who were subscribers as on ",."".#+.

%ontribution 3 The employer8s contribution of %.**V will be diverted to the fund of ;ension &cheme. 'mployee does not have to make any contribution. 'mployer8s contribution is "9VE "AV. In such cases, %.**V is diverted to ;ension scheme and balance ".,1VE*.,1V as the case may be, will be in credit of employee8s name in ;rovident Fund account. The %.**V is on ma/imum salary of Rs. ,,+AA. If some employers are paying contribution on salary in e/cess of Rs. ,,+AA, the e/cess contribution will be credited to ;rovident Fund account and not to ;ension scheme. ?o separate administration charges or inspection charges are payable, as these are already paid along with ;rovident Fund contribution. =enefits 6nder The /che e 3 (embers will get pension on superannuation or retirement from service and upon disablement during employment. Family pension will be available to widowEwidower for life or till heEshe remarries. In addition, children will be entitled to pension, upto 9+ years of their age. In case of orphans, pension at enhanced rate is available upon death of widowEwidower or ceasing payment of widow pension. )enefit of pension to children or orphan is only restricted for two childrenEorphans. If the person is unmarried or has no family, pension is available to nominee for a specified period. %o utation of #ension 3 The member can commute **.**V of the pension, so as to receive

hundred times the monthly pension so commuted as commuted value of pension. )alance will be paid on monthly basis. 0 ployees 2eposit Linked Insurance /che e 5 The purpose of the scheme is to provide life insurance benefits to employees who are already covered under ;FEF;F. The employer has pay contribution e7ual to A.+AV of the total wages of employees In addition, administrative charges of A."V of total wages. Q?otification ?o. A5 +A*4'6 dated 9%313"#1, issued uEs , 496 of ;F ActL. The employee does not contribute any amount to the scheme. The salary limit for coverage of employees is same as that of ;rovident Fund. '/emption from the scheme can be obtained from R;F ;F authorities. B n fit to nomin of mploy ! If an employee dies during employment, his nominee or if LI @roup @ratuity scheme is

adopted by employer. If e/emption is granted, only inspection charges X A.AA+V are payable to

family member gets an amount e7ual to average balance in the ;rovident Fund Account of the deceased employee during last "9 months. If such balance is more than Rs. *+,AAA, the

insurance amount payable is Rs. *+,AAA plus 9+V of the amount in e/cess of Rs. *+,AAA, sub2ect to overall limit of Rs. ,A,AAA. If the employees are covered under another life insurance scheme whose benefits are better than this scheme, an e/emption from this scheme can be obtained. QIncreased to *+,AAA and ,A,AAA w.e.f. "*.,.9AAAL The entral @overnment with the motive of providing additional &ocial &ecurity in the form of Life

Insurance to the family of the deceased member of the ;rovident Fund, introduced the 'mployees 0eposit Linked Insurance &cheme with effect from "3%3"#1, as provided under &ection ,4 6 of the 'mployeesF ;rovident Fund G (; Act, "#+9. The benefit under the &cheme is so devised that it acts as an incentive to the members to save more in their ;rovident Fund Account. As the name of the &cheme says, the benefit is linked to the amount of accumulation in the ;rovident Fund Account of the member. Applicability! The &cheme applies to all the establishments to which the 'mployeesF ;rovident Fund &cheme applies. De bership! All the members of the 'mployeesF ;rovident Fund &cheme are covered as members of the 'mployeesF 0eposit Linked Insurance &cheme also. %ontribution! :nder this &cheme, the members do not contribute any amount as contribution. However, the employer pays an amount e7ual to A.+V of the total wages paid to the members as contribution. Ad inistrative %harges! As regards Administrative charges, the employer is re7uired to pay an amount e7ual to A.A"V of the wages sub2ect to a minimum of Rs. 9E3 per month. 0Fe ption! 4&ection "149A6 of the Act and ;ara 9% of 'mployeesF 0eposit Linked Insurance &cheme, "#1,6 The provisions are available as per &ection "149A6 of the Act and para 9%4"6 and 9%4$6 of the 'mployeesF 0eposit Linked Insurance &cheme , "#1, for grant of e/emption to an establishment or to an employee or to a class of employees as the case may be, from the operation of all or any

of the provisions of the &cheme, where the Life Assurance benefit of the &cheme in the establishment is more beneficial than the benefits provided under the statutory &cheme. Inspection %harges! An employer of an establishment e/empted from the provisions of the 'mployeesF 0eposit Linked Insurance &cheme is re7uired to pay inspection charges at the rate of A.AA+V sub2ect to a minimum of Re."E3 per month. Assurance =enefit! The benefit provided under the 'mployeesF 0eposit Linked Insurance &cheme is called Assurance )enefit. 5n the death of the member while in service, the nominee or any other person entitled to receive the ;rovident Fund benefits will, in addition to the ;rovident Fund, receive the Assurance )enefit under 'mployeesF 0eposit Linked Insurance &cheme. /cale of Assurance =enefit! From "3$3#* onwards the amount of Assurance )enefit payable is an amount e7ual to the average balance in the amount of deceased in the Fund during the preceding "9 months or during the period of his membership whichever is less, e/cept where the average balance e/ceeds Rs. 9+,AAAE3 amount payable shall be Rs. 9+,AAAE3 plus 9+V of the amount in e/cess of Rs.9+,AAAE3 sub2ect to a ceiling of Rs. ,+,AAAE3. The Form prescribed for claiming the Assurance )enefits under the 'mployeesF 0eposit Linked Insurance &cheme, "#1,, is Form +4IF6. (hat are the periodical returns to be sent by an e ployer to the #rovident 9und ,ffice) The employer of an un3e/empted establishment has to forward the following returns. These returns will include details re7uired under the three schemes namely, 'mployees ;rovident Fund &cheme, "#+9, 'mployee 0eposit Linked Insurance &cheme,"#1, and 'mployee ;ension &cheme, "##+. aB 9or 5;A.evisedB8 The details of employees enrolled as members of 'mployeesF ;rovident Fund&F+9, 'mployeesF 0eposit Linked InsuranceF1, G 'mployeesF ;ension &chemeF#+ on coverage of the establishment3 This is to be submitted immediately after coverage, within "+ days of coverage. bB 9or 5+$A8 The details of the contributions recovered form the members G paid along with details of

employersF contribution G administrative charges3 This is to be submitted monthly by 9+th of following month. cB 9or 5*8 The details of the employees enrolled newly to the ;rovident Fund3 To be submitted along with Form3"9A every month within "+ days of the following month. dB 9or 5+G8 The details of the employees leaving service during the month3 To be submitted along with form3 "9A. eB %hallans8 The triplicate copy of challans in token of having remitted the ;rovident Fund dues in the bank3 to be submitted along with form3"9A every month. fB 9or 5$A.evisedB8 ?omination form3 To be submitted along with form3+E#. gB 9or 5&A8 The details of wages G contributions in respect of each member, to be prepared financial year wise3 To be submitted to the ;rovident Fund office by *Ath of April every year. hB 9or 5:A8 Yearly consolidated statement of contributions3 To be forwarded yearly along with form3*A. It should be ensured that all the form3*A are entered in form3,A, irrespective of whether the form3 *A was forwarded for the broken period and the total dues as per the form3"9A for the whole year agrees with the total of form3,A within *Ath April. iB 9or 5*A8 Return of ownership of the establishment3 To be forwarded immediately after coverage G whenever there is a change in the ownership, it has to be intimated with in "+ days of change. jB /peci en signature8 &pecimen signature of the officerEofficers who are authori-ed to sign the returnsEdocuments relating to ;rovident Fund forwarded immediately after coverage G whenever there is a change in authori-ed officer.

The 0 ployees /tate Insurance Act A0/I ActB, +;'<

The '&I Act has been passed to provide for certain benefits to employees in case of sickness, maternity and employment in2ury and to make provisions for related matters. As the name suggests, it is basically an Pinsurance8 scheme i.e. employee gets benefits if he is sick or disabled. '&I 3 'mployees &tate Insurance orporation 4'&I 6 has been formed to supervise the scheme

under &ection * of the Act. The

orporation supervises and controls the '&I scheme.

7o 2is issal or #unish ent 2uring #eriod of /ickness 3 &ection 1* of the Act provides that no employer shall dismiss, discharge or reduce or otherwise punish an employee during the period employee is in receipt of sickness benefit or maternity benefit. He also cannot dismiss, discharge or otherwise punish employee when he is in receipt of disablement benefit or is under medical treatment or is absent from work due to sickness. This gives protection to employee when he is in receipt of sickness benefit or maternity benefit. 'mployer cannot take disciplinary action against employee in such cases. This provision is grossly misused by employees. However, in Bu&kingham ' Carnati& Co v. Venkatayya 3 AIR "#,$ & "919 T "#,*416 FLR *$* T

4"#,$6 $ & R 9,+ T 4"#,*6 9 LL> ,*% T 9+ F>R 9+ 4& 6, it was rightly held that this provision 4of &ection 1*6 is applicable only in case of punitive action for all kinds of misconduct during which employee has received sickness benefits. This protection is not applicable in case of abandonment of employment or when termination is automatic as per contract. K followed in Rajveer Singh v. %udge "##, LLR ," 4Ra2 H 6, where it was hold that provisions of &ection 1* are not applicable when termination of an employee is automatic. Applicability of ESI Sc$ m " The scheme is applicable to all factories. Q&ection "4$6L. The

Appropriate @overnment can also make it applicable to any other industrial, commercial, agricultural or other establishments, by issuing notification and giving , month notice. Q&ection "4+6L. Thus, '&I Act can be made applicable to Pshops8 also. However, since @overnment has to provide for hospitals and medical facilities, the Act can be made applicable to different parts of &tate at different dates. Thus, if a factory is at a place where '&I is unable to provide medical facilities, '&I Act may not be made applicable to that area. @overnment can e/empt a factory or establishment or persons or class of persons from provisions of '&I Act, if the employees are getting better medical facilitiesE Qe.g. if @overnment is convinced that the factory itself is providing very good medical facilities e.g. like TI& 5L.

.egional ,ffices ? =ranch ,ffices Get %overed 3 Regional offices of a factory, which have their connection to the factory and where the ;rincipal 'mployer has control over the regional offices, the regional offices will be covered under (S)C ! ydera*ad "s*estos Cement Produ&ts v. (S)C 3 AIR "#1% & *+, T 4"#1%6 9 & R *$+ T 4"#1%6 " & "#$. If head office is covered under '&I , branch offices are also covered when branch and principal office are inter3dependent and there is unity of relationship. 3 Transport Corporation of )ndia v. (S)C "###416 & AL' ,* T 9AAA LLR ""* T %* FLR #1A T "### AIR & . $*$A T AIR 9AAA & 9*% 4& * member bench6. *9 T AR "#%1 & $$1 T

,utside agencies can be covered 3 In P+ Pate, v. U-) 4"#%,6 " & "#%+ II

LR *99 4& 6, workers were given work of making FbidisF as home. Right of re2ection of

bidis was with employer. It was held that test of control and supervision lies in the right of re2ection. It was held that employees working outside can be covered under '&I , if there is master servant relationship. * finition of +factory, a# p r ESI Act ! The PFactory8 means any premises where manufacturing process is carried out. If manufacture is without aid of power, the Act is applicable if persons employed are at least 9A. If manufacture is with aid of power, the Act applies if persons employed are at least "A. Q&ection 94"96L. 3 3 However, Pmines8 have been e/cluded. 3 3 P(anufacturing process8 has same meaning as defined under Factories Act. Q&ection 94"$AA6L. 5ne a factory or establishment is covered, it continues to be covered even if number of employees reduce. Q&ection "4,6L %onstruction (orkers 7ot %overed K are not covered under '&I . K '&I onstruction workers employed in construction activities

circular ?o. ;3"94""63""E91E## Ins.I= dated "$3,3"###. 3 3

However, if administrative office employs 9A or more eligible employees, that establishment and employees working in administrative office will be covered. Employ r und r ESI Act # P;rincipal 'mployer8 means R owner or occupier of factory R Head of department in case of @overnment department and R ;erson responsible for supervision and control, in case of any other establishment. Q&ection 94"16L. 3 3 'mployees working though contractor are also covered. P ontractor8 is termed as PImmediate 'mployer8. PImmediate employer8 means a person who has undertaken the e/ecution, on the premises of factory or establishment to which this Act applies. He may do on his own or under the supervision of ;rincipal 'mployer. The work should be part of work of factory or establishment of principal employer or is preliminary or incidental to the work of factory or establishment. Q&ection 94"*6L. ;rimary liability of '&I contribution is of ;rincipal 'mployer. Q&ection $A4"6L. He can recover the contribution paid by him from the Pimmediate employer8 i.e. contractor. Q&ection $"L.

Employ

und r ESI Act ! P'mployee8 means any person employed for wages in or in

connection with work of a factory or establishment to which the '&I Act applies. 'arlier employees drawing wages upto Rs. ,,+AA per month were covered under the '&I Act scheme. Q&ection 94#6L. However, w.e.f " st April 9AA$, this wage ceiling has been increased to Rs. 1,+AA per month. 'mployees include R persons employed through contractor R Apprentices other than those covered under PApprentices Act8 R ;ersons employed in administration office, department or branch for purchase or sale of products. R asual workers engaged in work incidental to or connected with work of factory or establishment R 'mployees working at head office when factory is located at different place R anteen staff, watch and ward staff are employees R &taff in hospital attached to factory are employees. 3 3 (embers of Indian ?aval, (ilitary or Air Forces are e/cluded. 9ollowing are not 0 ployees 3 R ;ersons drawing wages over Rs. 1,+AA per month R member of Army, ?avy or Air Force. R ;artners of firm are not employees even if they are drawing wages 3 R./ (S)C v. Ramanuja +at&h )ndustry AIR "#%+ & 91% T "#%+4"6 & 9"% T "##%4,6 & AL' *% R ;ersons employed in @overnment establishments. R construction workers engaged in raising additional building subse7uent to initial set up of factory. Contribution to ESIC Fund " )oth employee and employer have to make contribution to '&I . The employer has to deduct contribution from wages of employee and pay to '&I employer8s contribution as well as employees8 contribution. Q&ection *#4"6L. The contribution is payable for Pwage period8 i.e. the period in respect of which wages are payable to employee. Q&ection *#496L. ?ormally, Pwage period8 is a month. The employee8s contribution is ".1+V of wages. It should be rounded off to ne/t + paise. 'mployees contribution is not payable when daily wages are below Rs "+E3. 'mployer8s contribution is $.1+V of total wage bill of all employees in respect of every wage period. Thus, it is not necessary to calculate employerFs contribution separately for each employee. $.1+V of gross wages should be calculated and rounded off to ne/t + paise. 'mployees drawing wages lower than Rs 9+ per day do not have to pay employeeFs share. The contribution has to be paid within 9" days from close of the month. It is payable by a challan in authorised bank. 3 3 If the contribution is not paid in time, interest X "9V is payable. Q&ection *#4+64a6L. In addition, '&I authorities can impose Pdamages8 varying between +V to 9+V of arrears of both the

contribution uEs %+).

'mployer cannot deduct employer8s contribution from the salary of employee. Q&ection $A4*6L. Liability of #rincipal 0 ployer K In case of employees of contractor, liability is of ;rincipal 'mployer. In Britannia )ndustries v. (S)C 49AA"6 #% F>R +9A 4(ad H 6, it was held that ;rincipal 'mployer will be liable to penalty and damages also if contribution is not paid on due date. K same view in Padmini Produ&ts v. (S)C 9AAA496 Oar L> *,# 4Oarn H 6. (ag for purpo# of ESI Act " P.ages8 means all remuneration paid or payable in cash to

employee according to terms of contract of employment and includes any payment made to an employee in respect of period of authorised leave, lock3out, lay3off, strike which is not illegal and other additional remuneration paid at interval not e/ceeding two months. It does not include R contribution paid by employer to any pension fund or provident fund R Travelling allowance R Reimbursement of e/penses made by nature of employment of the employee R gratuity. Q&ection 94996L. Thus, wages include basic pay, dearness allowance, city compensatory allowance, payment of day of rest, overtime wages, house rent allowance, incentive allowance, attendance bonus, meal allowance and incentive bonus. However, wages do not include annual bonus, unilateral rewards scheme 0inam6, e1 gratia payments made every 7uarter or every year travelling allowance, retrenchment compensation, encashment of leave and gratuity. Contribution p riod and B n fit p riod " ontribution period is 4a6 "st &eptember to *"st

(arch 4*6 "st April to *Ath &eptember. The corresponding benefit period is 4 a6 following "st >uly to *"st 0ecember 4*6 following "st >anuary to *Ath >une. Thus, Pbenefit period8 starts three months after the Pcontribution period8 is over. The relevance of this definition is that sickness benefit and maternity benefit is available only during Pbenefit period8. Thus, an employee gets these benefits only after # months after 2oining employment and paying contribution. However, other benefits are available during contribution period also. B n fit# to mploy # co' r d und r ESI Act " An employee is entitled to get benefits which

are medical benefits as well as cash benefits. He also can get disablement benefit. T$ Employ # Stat In#uranc Corporation- ESIC- $a# on t$ 1. t$ of /un ,01- ta2 n a

$i#toric d ci#ion to ta2 o' r t$ ESI #c$ m in t$ Stat # #ub) ct to t$ %illingn ## of t$ Stat 3o' rnm nt#4 T$ d ci#ion %a# ta2 n at t$ 151t$ m $ ld und r t$ c$airman#$ip of t$ C$andra# 2$ar Rao4 ting of t$ ESI Corporation form r Labour and Employm nt 6ini#t r- S$ri

#ay ent of Gratuity Act, +;H$

@ratuity is a lump sum payment to employee when he retires or leaves service. It is basically a retirement benefit to an employee so that he can live life comfortably after retirement. However, under @ratuity Act, gratuity is payable even to an employee who resigns after completing at least + years of service. In 0T Retired 'mployees v. 0elhi Transport orporation 9AA"4$6 & AL' *A T 9AA" AIR & .

9AA+, it was observed that gratuity is essentially a retiring benefit which as per &tatute has been made applicable on voluntary resignation as well. @ratuity is reward for good, efficient and faithful service rendered for a considerable period. A%T #.,-I20/ 9,. DI7ID6D G.AT6ITJ ,7LJ K The @ratuity Act provides only for minimum gratuity payable. If employee has right to receive higher gratuity under a contract or under an award, the employee is entitled to get higher gratuity. Q&ection $4+6L. 0 ployers liable under the sche e 3 The Act applies to every factory, mine, plantation, port, and railway company. It also applies to every shop and establishment where "A or more persons are employed or were employed on any day in preceding "9 months. Q&ection"4*6L. &ince the Act is also applicable to all shops and establishments, it will apply to motor transport undertakings, clubs, chambers of commerce and associations, local bodies, solicitor8s offices etc. , if they are employing "A or more persons. 0 ployees eligible for gratuity K 8'mployee8 means any person 4other than apprentice6 employed on wages in any establishment, factory, mine, oilfield, plantation, port, railway company or shop, to do any skilled, semi3skilled or unskilled, manual, supervisory, technical or clerical work, whether terms of such employment are e/press or implied, and whether such person is employed in a managerial or administrative capacity. However, it does not include any entralE&tate @overnment employee. Q&ection 94e6L. Thus, the Act is applicable to all employees 3 workers as well as persons employed in administrative and managerial capacity. @ratuity is payable to a person on 4a6 resignation 4b6 termination on account of death or disablement due to accident or disease 4c6 retirement 4d6 death. ?ormally, gratuity is payable only after an employee completes five years of continuous service. In case of death and disablement, the condition of minimum + years8 service is not applicable. Q&ection $4"6L. The Act is applicable to all employees, irrespective of the salary.

A ount of gratuity payable 3 @ratuity is payable X "+ days wages for every year of completed service. In the last year of service, if the employee has completed more than , months, it will be treated as full year for purpose of gratuity. 3 3 In case of seasonal establishment, gratuity is payable X 1 days wages for each season. Q&ection $496L. .ages shall consist of basic plus 0.A, as per last drawn salary. However, allowances like bonus, commission, HRA, overtime etc. are not to be considered for calculations. Q&ection 94s6L. In case of employees paid on monthly wages basis, per day wages should be calculated by dividing monthly salary by 9, days to arrive at daily wages e.g. if last drawn salary of a person 4basic plus 0A6 is Rs. 9,,AA per month, his salary per day will be Rs. "AA 49,,AA divided by "AA6. Thus, the employee is entitled to get Rs. ",+AA Q"+ days multiplied by Rs. "AA daily salaryL for every year of completed service. If he has completed *A years of service, he is entitled to get gratuity of Rs. $+,AAA 4Rs. ",+AA multiplied by *A6. (a/imum gratuity payable under the Act is Rs. *.+A lakhs 4the ceiling was Rs. ",AA,AAA which was increased to 9.+A lakhs on 9$.#.#1 by an ordinance which was later increased to Rs *.+A lakhs while converting the ordinance into ActL. DAKID6D G.AT6ITJ #AJA=L0 K (a/imum gratuity payable is Rs $ lakhs. Q&ection $4*6L. Q5f course, employer can pay more. 'mployee has also right to get more if obtainable under an award or contract with employer, as made clear in &ection $4+6L. I? 5('3TAU 'U'(;TI5? 3 @ratuity received upto Rs. *.+A lakhs is e/empt from Income Ta/. @ratuity paid above that limit is ta/able. Q&ection "A4"A6 of Income Ta/ ActL. 3 3 However, employee can claim relief uEs %# in respect of the e/cess amount. ?o ompulsory insurance of gratuity liability K &ection $A provides that every employer must or any other insurer. However, @overnment

obtain insurance of his gratuity liability with LI

companies need not obtain such insurance. If an employee is already member of gratuity fund established by an employer, he has option to continue that arrangement. If an employer employing more than +AA persons establishes an approved gratuity fund, he need not obtain insurance for gratuity liability. 3 3 However, this &ection has not yet been brought into force. Hence, presently, such compulsory insurance is not necessary. @ratuity cannot be attached 3 @ratuity payable cannot be attached in e/ecution of any decree or order of any civil, revenue or criminal court, as per &ection "* of the Act.

#ay ent of =onus Act, +;:*

The term CbonusD has not been defined in the ;ayment of )onus Act, "#,+. .ebster8s International 0ictionary, defines bonus as Csomething given in addition to what is ordinarily received by or strictly due to the recipientD. The 5/ford wagesD. L"A"T 9or ula regarding pay ent of bonus8 A dispute relating to payment of bonus by the Industrial otton (ills of )ombay was decided by the ourt was considered by oncise 0ictionary defines it as Csomething to the good into the bargain 4and as an e/ample6 gratuity to workmen beyond their

ourt, )ombay. An appeal against the award of the Industrial

the Full )ench of the then Labour Appellate Tribunal 4(ill 5wners8 Association, )ombay v. Rashtriya (ill (a-dur &angh, )ombay, "#+# II LL> "9$16. In its decision, the LAT laid down the principles involved in the grant of bonus to workers. These principles are known as the LAT Formula. According to the formula, the following prior charges were to be deducted from gross profits! ". 9. *. $. ;rovision for depreciationI Reserve for rehabilitationI Return of , per cent on the paid up capitalI and Return on the working capital at a lower rate than the return on paid3up capital.

The balance, if any, was called Cavailable surplusD and the workmen were to be awarded a reasonable share out of it by way of bonus for the year. )onus is really a reward for good work or share of profit of the unit where the employee is working. 5ften there were disputes between employer and employees about bonus to be paid. It was thought that a legislation will solve the problem and hence )onus Act was passed. :nfortunately, in the process, bonus has become almost as deferred wages due to provision of payment of minimum %.**V and ma/imum 9AV bonus. )onus Act has not in any way reduced the disputes. The Act is applicable to 4a6 any factory employing "A or more persons where any processing is carried out with aid of power 4b6 5ther establishments 4established for purpose of profit6 employing 9A or more persons. (inimum bonus payable is %.**V and ma/imum is 9AV. )onus is payable annually within % months from close of accounting year. )onus is payable to all employees whose salary or wages do not e/ceed Rs *,+AA per month provided they have worked

for at least *A days in the accounting year. However, for calculation of bonus, ma/imum salary of Rs 9,+AA is considered. 5nce the Act is applicable, it continues to apply even if number of employees fall below 9A. The Act is applicable to @overnment companies and corporations owned by @overnment which produces goods or renders services in competition with private sector. However, the Act is not applicable to @overnment employees, the employees of (unicipal orporation or (unicipality, railway employees, university and employees of educational institutions, public sector insurance employees, employees of R)I and public sector financial institutions, charitable hospitals, social welfare organisations and defense employees. The Act does not apply to any institution established not for purposes of profit. 0stablish ents to which the Act is applicable 3 The Act applies toM 4a6 every factoryI and 4b6 every other establishment in which twenty or more persons are employed on any day during an accounting year. Qsection "4*6L. Act not to apply to certain classes of e ployees! &ection *9 of the Act provides that the Act shall not apply to the following classes of employees! ". 9. *. $. authorityI +. a6 b6 c6 ,. 1. %. a6 'mployees employed by! The Indian Red ross &ociety or any other institution of a like nature 'mployees employed by any insurer carrying on general insurance business and the &eamen as defined in clause 4$96 of &ection * of the (erchant &hipping Act, "#+%I 'mployees registered or listed under any scheme made under the 0ock .orkers 'mployees employed by an establishment engaged in any industry called on by or entral @overnment or a &tate @overnment or a local

employees employed by the Life Insurance orporation of IndiaI

4Regulation of 'mployment6 Act, "#$% and employed by registered or listed employersI under the authority of any department of

including its branchesI :niversities and other educational institutionsI Institutions 4including hospitals, chambers of commerce and social welfare 'mployees employed through contractors on building operationsI 'mployees employed by the Reserve )ank of IndiaI 'mployees employed by! The Industrial Finance orporation of IndiaI

institutions6 established not for the purpose of profitI

b6 c6 d6 e6 f6 fa6

Any Financial orporation established under &ection *, or any >oint Financial The 0eposit Insurance The :nit Trust of IndiaI The Industrial 0evelopment )ank of IndiaI The &mall Industries 0evelopment )ank of India established under &ection * of the orporationI

orporation established under &ection *A of the &tate Financial orporations Act, "#,"I The ?ational )ank for Agriculture and Rural 0evelopmentI

&mall Industries 0evelopment )ank of India Act, "#%#I fb6 The ?ational Housing )ankI Any other financial institution 4other than )anking sector, which the ompany6 being an establishment in public

entral @overnment may by notification specify having regard to 4i6 its capital

structureI 4ii6 its ob2ectives and the nature of its activitiesI 4iii6 the nature and e/tent of financial assistance or any other concession given to it by the @overnmentI and 4iv6 any other relevant factor. Apart from the above, the appropriate @overnment has necessary powers under &ection *, to e/empt any establishment or class of establishments from all or any of the provisions of the Act for a specified period having regard to its financial position and other relevant circumstances and it is of the opinion that it will not be in the public interest to apply all or any of the provisions of this Act thereto. It may also impose such conditions while according the e/emptions as it may consider fit to impose. I portant 2efinitions! Accounting Jear CAccounting YearD means3 ". 9. *. 4a6 In relation to a corporation, the year ending on the day on which the books In relation to a company, the period in respect of which any profit and loss In any other case3 the year commencing on the "st day of AprilI or

and accounts of the corporation are to be closed and balancesI account of the company laid before it in annual general meeting is made upI

4b6

if the accounts of an establishment maintained by the employer thereof are

closed and balances on any day other than the *" st day of (arch, then, at the option of the employer, the year ending on the day on which its accounts are so closed and balanced. ;rovided that an option once e/ecuted by the employer under paragraph 4b6 of this sub3clause shall not again be e/ercised e/cept with the previous permission in writing of the prescribed authority and upon such conditions as that authority may think fit. Q&ection 94"6L Allocable /urplus! It means 4a6 in relation to an employer, being a company 4other than a banking company6 which has not made the arrangements prescribed under the Income3ta/ Act for the declaration and payment within India of the dividends payable out of its profits in accordance with the provisions of &ection "#$ of that Act, ,1V of the available surplus in an accounting year. 4b6 In any other case, ,AV of such available surplus Q&ection 94$6L. Available /urplus! It means the available surplus under &ection +. Z&ection 94,6[. Award! AwardD means an interim or a final determination of any industrial dispute or of any 7uestion relating thereto by any Labour ourt, Industrial Tribunal or ?ational Tribunal constituted under the Industrial 0isputes Act, "#$1 or by any other authority constituted under any corresponding law relating to investigation and settlement of industrial disputes in force in a &tate and includes an arbitration award made under &ection "AA of that Act or under that law Q&ection 9416L. 0 ployee 'mployeeD means any person 4other than an apprentice6 employed on a salary or wages not e/ceeding Rs.*,+AA per mensem in any industry to do any skilled or unskilled, manual, supervisory, managerial, administrative, technical or clerical work or hire or reward, whether the terms of employment be e/press or implied. Q&ection 94"*6L ;art time permanent employees working on fi/ed hours are employees. 0 ployer

C'mployerD includes! ". In relation to an establishment which is a factory, the owner or occupier of the factory, including the agent of such owner or occupier, the legal representative of a deceased owner or occupier, and where a person has been named as a manager of the factory under clause 4f6 of &ub3section 14"6 of the Factories Act, "#$%, the person so namedI and 9. In relation to any other establishment, the person who, or the authority which, has the ultimate control over the affairs of the establishment and where the said affairs are entrusted to a manager, managing director or managing agent, such manager, managing director or managing agent. Q&ection 94"$6L 0stablish ent in #rivate /ector! It means any establishment other than an establishment in public sector.Q&ection 94"+6L /alary or (ages8 The C&alary or .ageD means all remuneration 4other than remuneration in respect of over3time work6 capable of being e/pressed in terms of money, which would, if the terms of employment, e/press or implied, were fulfilled, be payable to an employee in respect of his employment or of work done in such employment and includes dearness allowance 4that is to say, all cash payments, by whatever name called, paid to an employee on account of a rise in the cost of living6 but does not include! ". 9. *. $. +. ,. 1. any other allowance which the employee is for the time being entitled toI the value of any house accommodation or of supply of light, water, medical attendance or any traveling concessionI any bonus 4including incentive, production and attendance bonus6I any contribution paid or payable by the employer to any pension fund or provident fund or any retrenchment compensation or any gratuity or other retirement benefit payable to the any commission payable to the employee Q&ection 949"6L

any other amenity or of any service or of any concessional supply of foodgrains or other articlesI

for the benefit of the employee under any law for the time being in forceI employee or any e/3gratia payment made to himI

P9actory8 has same meaning as per Factories Act. Qsection 94"16 of )onus ActL. The words used are Pnumber of persons employed8. Hence, all persons employed are to be considered, including those who are not eligible for bonus. Thus, all employees including those,

whose salary or wages e/ceed Rs *,+AA per annum will have to be considered for purpose of deciding eligibility. D0A7I7G ,9 L0/TA=LI/HD07T8 3 The word Pestablishment8 is not defined in the Act. ?ormally, Pestablishment8 is a permanently fi/ed place for business. The term Pestablishment8 is much wider than Pfactory8. It covers any office or fi/ed place where business is carried out. 0/TA=LI/HD07T I7 #6=LI% /0%T,. %,-0.02 ,7LJ I7 %0.TAI7 %A/0/ 3 The Act applies to establishment in public sector only if the establishment in public sector sells the goods or renders services in competition with an establishment in private sector, and the income from such sale or services or both is not less than twenty per cent, of the gross income of the establishment in public sector for that year. Qsection 9A4"6L. In other cases, the provisions of this Act do not apply to the employees employed by any establishment in public sector. Qsection 9A496L. As per section *94v64c6, the Act does not apply to any institution established not for purposes of profit. 'stablishment in public sector means an establishment owned, controlled or managed byM 4a6 a @overnment company as defined in section ,"1 of the ompanies Act, "#+, 4" of "#+,6 4b6 a corporation in which not less than forty per cent of its capital is held 4whether singly or taken together6 by the @overnmentI or the Reserve )ank of IndiaI or a corporation owned by the @overnment or the Reserve )ank of India. Qsection 94",6L. 'stablishment which is not in public sector is Pestablishment in private sector8 Qsection 94"+6L. C%orporationD means any body corporate established by or under any entral ;rovincial or &tate

Act but does not include a company or a co3operative society. Qsection 94""6L. 0/TA=LI/HD07T/ T, I7%L620 20#A.TD07T/, 6720.TAEI7G/ A72 =.A7%H0/ 3 .here an establishment consists of different departments or undertakings or has branches, whether situated in the same place or in different places, all such departments or undertakings or branches shall be treated as parts of the same establishment for the purpose of computation of bonus under this Act. Qsection *L (ho are eligible for bonus 3 'mployees drawing salary or wages upto Rs *,+AA per month are entitled to bonus, if he has worked for at least *A working days in an accounting year. 'ven a worker working in seasonal factory is eligible if he has worked for at least *A working days. Apprentices are not eligible for bonus. &alary above Rs. 9,+AA is not considered for calculation of )onus. Qsection "9L. 'mployee drawing salaryEwage e/ceeding Rs *,+AA is not entitled to any bonus under the Act.

Thus, minimum bonus X %.**V will be Rs 9,+AA and ma/imum X 9AV will be Rs ,,AAA for the year, when salary of employee e/ceeds Rs 9,+AA but is less than Rs *,+AA. 26TI0/ ? .IGHT/ ,9 0D#L,J0. 26TI0/ To calculate and pay the annual bonus as re7uired under the Act To submit an annul return of bonus paid to employees during the year, in Form 0, to the To co3operate with the Inspector, produce before him the registersErecords maintained, To get his account audited as per the directions of a Labour ourtETribunal or of any such

Inspector, within *A days of the e/piry of the time limit specified for payment of bonus. and such other information as may be re7uired by them. other authority. .IGHT/ An employer has the following rights! Right to forfeit bonus of an employee, who has been dismissed from service for fraud,

riotous or violent behaviour, or theft, misappropriation or sabotage of any property of the establishment. Right to make permissible deductions from the bonus payable to an employee, such as, Right to refer any disputes relating to application or interpretation of any provision of the festivalEinterim bonus paid and financial loss caused by misconduct of the employee. Act, to the Labour ourt or Labour Tribunal. 0LIGI=ILITJ 9,. =,76/ I9 (,.E02 9,. DI7ID6D &G 2AJ/ 3 'very employee shall be entitled to be paid be his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year. Qsection %L %o putation of a ount available for distribution as bonus 3 The establishment has to prepare a balance sheet and profit and loss account of the year and calculate the Pgross profit8, Pavailable surplus8 and Pallocable surplus8 as per method and formula given in )onus Act. The first step is to calculate P@ross ;rofit8. As per section $, the gross profit in respect of any accounting year is re7uired to be calculated as per First &chedule to Act in case of banking company and as per second schedule in case of other establishments. After calculation of P@ross ;rofit8 as per section $, ne/t step is to calculate PAvailable &urplus8. As per section +, Pavailable surplus8 is calculated by deducting sums as specified in section , from Pgross profit8 arrived at as per section , and adding difference e7ual to income ta/ on the bonus paid in the preceding year.

Thus, Available &urplus is e7ual to @ross ;rofit Qas per section $L less prior charges allowable as deduction uEs , plus amount e7ual to income ta/ on bonus portion calculated as per proviso 4b6 to section +. Allocable surplus is e7ual to ,AV of Pavailable surplus8 calculated as per provisions of section +. QIn case of company which does not deduct ta/ at source as per provisions of section "#$ of Income Ta/ Act, Pallocable surplus8 will be ,1V of Pavailable surplus8L. This Pallocable surplus8 has to be distributed as bonus among employees in proportion to the salary or wages actually earned by each employee during the year. However, this is sub2ect to minimum %.**V and ma/imum 9AV as e/plained below. %AL%6LATI,7 ,9 =,76/ /ID#LI9I02! The method for calculation of annual bonus is as follow! ". alculate the gross profit in the manner specified in3 a6 b6 First &chedule, in case of a banking company, or &econd &chedule, in any other case.

9. alculate the Available &urplus. a6 Available &urplus T A\), where A T @ross ;rofit K 0epreciation admissible uEs *9 of the

Income ta/ Act 3 0evelopment allowance 3 0irect ta/es payable for the accounting year 4calculated as per &ec.16 K &ums specified in the Third &chedule. b6 ) T 0irect Ta/es 4calculated as per &ec. 16 in respect of gross profits for the immediately

preceding accounting year K 0irect Ta/es in respect of such gross profits as reduced by the amount of bonus, for the immediately preceding accounting year. *. alculate Allocable &urplus a6 b6 Allocable &urplus T ,AV of Available &urplus, ,1V in case of foreign companies. (ake ad2ustment for P&et3on8 and P&et3off8. For calculating the amount of bonus in respect

of an accounting year, allocable surplus is computed after considering the amount of set on and set off from the previous years, as illustrated in Fourth &chedule. The allocable surplus so computed is distributed amongst the employees in proportion to salary or wages received by them during the relevant accounting year. $. In case of an employee receiving salary or wages above Rs. 9,+AA the bonus payable is to be calculated as if the salary or wages were Rs. 9,+AA p.m. only.

/et off and set on provisions 3 It may happen that in some years, the allocable surplus is more than the amount paid to employees as bonus calculating it X 9AV. &uch e/cess Pallocable surplus8 is carried forward to ne/t year for calculation purposes. This is called Pcarry forward for being set on in succeeding years8. The ceiling on set on that is re7uired to be carried forward is 9AV of total salary and wages of employees employed in the establishment. In other words, even if actual e/cess is more than 9AV of salaryEwages, only 9AV is re7uired to be carried forward. The amount set on is carried forward only upto and inclusive of the fourth accounting year. If the amount carried forward is not utilised in that period, it lapses Qsection "+4"6L. &imilarly, in a particular year, there may be lower Pallocable surplus8 or no Pallocable surplus8 even for payment of %.**V bonus. &uch shortfall is also carried to ne/t year. This is called Pcarry forward for being set off in succeeding years8. Thus, in every year, Pallocable surplus8 is calculated. To this amount, set on from previous years is added. &imilarly, set off, if any, from previous years is deducted. This gives amount which is available for distribution as bonus. The amount set off is carried forward only upto and inclusive of the fourth accounting year. If the amount carried forward is not set off in that period, it lapses. Qsection "+496L Dini u bonus 3 'very employer shall be bound to pay to every employee in respect of any

accounting year, a minimum bonus which shall be %.** per cent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year. .here an employee has not completed fifteen years of age at the beginning of the accounting year, the minimum bonus payable is %.**V or Rs ,A whichever is higher. Qsection "AL. .hile computing number of working days, an employee shall be deemed to have worked in an establishment even on the days on which 4a6 He was laid off 4b6 He was on leave with salaryEwages4c6 He was absent due to temporary disablement caused by accident arising out of and in course of employment and 4d6 'mployee was on maternity leave with salaryEwages. Qsection "$L. #ay ent of aFi u bonus 3 .here in respect of any accounting year, the allocable surplus

e/ceeds the amount of minimum bonus payable to the employees, the employer shall, in lieu of such minimum bonus, be bound to pay to every employee in respect of that accounting year bonus which shall be an amount in proportion to the salary or wage earned by the employee during the accounting year sub2ect to a ma/imum of twenty per cent of such salary or wage. Qsection ""4"6L. 3 3 In computing the allocable surplus under this section, the amount set on or the amount set off under the provisions of section "+ shall be taken into account in accordance with the provisions of that section. Qsection ""496L.

Thus, ma/imum bonus payable to employee is 9AV in any accounting year. /alary or wages for calculating bonus 3 .here the salary or wage of an employee e/ceeds Rs 9,+AA per month, the bonus payable to such employee under sections "A or "" shall be calculated as if his salary or wages were Rs 9,+AA per month. Qsection "*L. In other words, employees drawing salary or wages between Rs 9,+AA to Rs *,+AA per month, are entitled to bonus on the basis of Rs 9,+AA per month salary only. /pecial #rovisions with respect to certain newly set up establish ents8 In the case of newly set up establishments following provisions have been made under &ection ", for the payment of bonus! ". .here an establishment is newly set up whether before or after commencement of this Act, the employees of such establishment shall be entitled to be paid bonus under this Act in accordance with the provisions of sub3sections 4"3A6, 4"3)6 and 4"3 6. 4"3A6 In the first five accounting years following the accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, from such establishment, bonus shall be payable only in respect of the accounting year in which the employer derives profit from such establishment and such bonus shall be calculated in accordance with the provisions of this Act in relation to that year, but without applying the provisions of &ection "+. 4"3)6 For the si/th and seventh accounting year in which the employer sells the goods produced or manufactured by him or renders services as the case may be, from such establishment, the provisions of &ection "+ shall apply sub2ect to the following modifications, namely! i. For the si/th accounting year! &et on set off, as the case may be, shall be made in the manner illustrated in the Fourth &chedule taking into account the e/cess or deficiency, if any as the case may be, of the allocable surplus set on or set off in respect of the fifth and si/th accounting year. ii. For the seventh accounting year! &et on or set off, as the case may be, shall be made in the manner illustrated in the Fourth &chedule taking into account the e/cess or deficiency, if any, as the case may be of the allocable surplus set on or set off in respect of the fifth, si/th and seventh accounting years. 4"3 6 From the eighth accounting year following the accounting year in which the employer sells the goods produced or manufactured by him or renders services, as the case may be from such establishment, the provisions of &ection "+ shall apply in relation to such establishment as they apply in relation to any other establishment.

0Fplanation I3For the purpose of sub3section 4"6 an establishment shall not be deemed to be newly set up merely by reason of a change in its location, management or ownership. 0Fplanation II5 For the purpose of sub3section4IA6, an employer shall not be deemed to have derived profit in accounting year unless3 a6 b6 He has made provision for that year8s depreciation to which he is entitled under the The arrears of such depreciation and losses incurred by him in respect of the Income3ta/ Act or, as the case may be, under the Agriculture Income ta/ law, and establishment for the previous accounting years have been fully set off against his profits. 0Fplanation III5For the purposes of sub3section 4"A6, 4")6 and 4" 6, sale of the goods produced or manufactured during the course of the trial running of any factory or of the prospecting stage of any mine or an oil field shall not be taken into consideration and where any 7uestion arises with regard to such production or manufacture, the decision of the appropriate @overnment, made after giving the parties a reasonable opportunity of representing the case, shall be final and shall not be called in 7uestion by any court or other authority. 496 The provisions of sub3sections 4"A6, 4")6 and 4" 6 shall, so far as may be, apply to new departments or undertakings or branches set up by e/isting establishments! ;rovided that if an employer in relation to an e/isting establishment consisting of different departments or undertakings or branches4whether or not in the same industry6 set up at different periods has, before the 9# th (ay, "#,+, been paying bonus to the employees of all such departments or undertakings or branches were set up, on the basis of the consolidated profits computed in respect of all such departments or undertakings or branches, then, such employer shall be liable to pay bonus in accordance with the provisions of this Act to the employee of all such departments or undertakings or branches 4whether set up before or after that date6 on the basis of the consolidated profits computed as aforesaid. .ithin the meaning of &ection ",4"3A6 the word CprofitD must obviously be construed according to its ordinary sense. A sense which is understood in trade and industry because the rationale behind &ection ",4"3A6 is that it is only when the employer starts making profits in the commercial sense that he should become liable to pay bonus under the Act. ;rofit in the commercial sense can be ascertained only after deducting depreciation and since there are several methods of computing depreciation, the one adopted by the employer, in the absence of any statutory provision to the contrary, would govern the calculation. '/planation II to &ection ",4"3A6 says that the employer shall not be deemed to have derived profits unless he has made provision for that years8 depreciation to which he is entitled to under the Income3ta/ Act. This e/planation embodies a clear legislative mandate that in determining for the purpose of sub3 section4"A6 of &ection ", whether the employer has made profit from the establishment in

accounting year, depreciation should be provided in accordance with the provisions of the Income3ta/ Act. learly, therefore, if depreciation is as prescribed in the Income Ta/ Act, There is no profit for the year in 7uestion and there is no liability on the part of the employer to pay bonus under the Act 4The (anagement of entral oal .ashery v. .orkmen, "#1%3II Labour Law >ournal *+A6. bonus!

Adjust ent of custo ary or interi

.here in any accounting year34a6 an employer has paid any ;u2a bonus or other customary bonus to an employeeI or 4b6 an employer has paid a part of the bonus payable under this Act to an employee before the date on which such bonus becomes payableI then, the employer shall be entitled to deduct the amount of bonus so paid from the amount of bonus payable by him to the employee under this Act in respect of that accounting year and the employee shall be entitled to receive only the balance 4&ection "16. 2eductions of certain a ounts fro bonus!

.here in any accounting year, an employee is found guilty of misconduct causing financial loss to the employer, then, it shall be lawful for the employer to deduct the amount of loss from the amount of bonus payable by him to the employee under this Act, in respect of that accounting year only and the employee shall be entitled to receive the balance, if any. 4&ection "%6 Ti e li it for pay ent of bonus! 4a6 .here there is a dispute regarding payment of bonus pending before any authority under &ection 99, all amounts payable to an employee by way of bonus under this Act shall be paid in cash by his employer, within a month from the date from which the award becomes enforceable or the settlement comes into operation, in respect of such dispute. 4b6 In any other case, the bonus should be paid within a period of eight months from the close of the accounting year. However, the appropriate @overnment or such authority as the appropriate @overnment may specify in this behalf may, upon an application made to it by the employer and for sufficient reasons, by order, e/tend the said period of % months to such further period or periods as it thinks fit, so, however, that the total period so e/tended shall not in any case e/ceed two years 4&ection "#6. .eference of disputes under the Act8 .here any dispute arises between an employer and his employee with respect to the bonus payable under this Act or with respect to the application of this Act to an establishment in public sector, then, such dispute shall be deemed to be an industrial dispute within the meaning of the

Industrial 0isputes Act, "#$1, or any corresponding law relating to investigation and settlement of industrial disputes in force in a &tate and provisions of that Act or, as the case may be, such law, shall, save as otherwise e/pressly provided, apply accordingly. 4&ection 996 Accuracy of Accounts! .here any industrial dispute arises with respect to bonus payable under the Act, the audited balance sheet and profit and loss account of a corporation or a company or a banking company shall be presumed to be correct. &imilarly, in the case of employers not being corporation, company or banking company, audited accounts will be presumed to be correct for the purpose of payment of bonus. =onus linked with production or productivity8 &ection *"A enables the employees and employers to evolve and operate a scheme of bonus payment linked to production or productivity in lieu of bonus based on profits under the general formula enshrined in the Act. However, bonus payments under &ection *"A are also sub2ect to the minimum of %.** V and ma/imum of 9AV. In other words, a minimum of %.**V is payable in any case and the ma/imum cannot e/ceed 9A V 4&ection *"A6. Agree ents inconsistent with the Act! &ub2ect to the provisions of &ection *"A, the provisions of this Act shall be in addition to and not in derogation of the Industrial 0isputes Act, "#$1, or any corresponding law relating to investigation and settlement of industrial disputes in force in a &tate. #ower of 0Fe ption! If the appropriate @overnment, having regard to the financial position and other relevant circumstances of any establishment or class of establishments, is of opinion that it will not be in public interest to apply all or any of the provisions of this Act thereto, it may, by notification in the 5fficial @a-ette, e/empt for such period as may be specified therein and sub2ect to such conditions as it may think fit to impose, such establishment or class of establishments from all or any of the provisions of this Act. 4&ection *,6 @overnment should consider public interest, financial position and whether workers contributed to the loss, before grant of e/emption 4>.O hemicals v. (aharashtra, "##, III LA )om "96. Application of certain laws not barred! &ave as otherwise e/pressly provided, the provisions of this Act shall be in addition to and not in derogation of the Industrial 0isputes Act, "#$1, or any corresponding law relating to investigation and settlement of industrial disputes in force in a &tate 4&ection *#6.

.0%,-0.J ,9 =,76/ 260 .here any bonus is due to an employee by way of bonus, employee or any other person authorised by him can make an application to the appropriate government for recovery of the money due. If the government is satisfied that money is due to an employee by way of bonus, it shall &uch application shall be made within one year from the date on which the money However the application may be entertained after a year if the applicant shows that there issue a certificate for that amount to the collector who then recovers the money. became due to the employee. was sufficient cause for not making the application within time. ,9907%0/ A72 #07ALTI0/ For contravention of the provisions of the Act or rules the penalty is imprisonment upto , For failure to comply with the directions or re7uisitions made the penalty is imprisonment In case of offences by companies, firms, body corporate or association of individuals, its months, or fine up to Rs."AAA, or both. upto , months, or fine up to Rs."AAA, or both. director, partner or a principal officer responsible for the conduct of its business, as the case may be, shall be deemed to be guilty of that offence and punished accordingly, unless the person concerned proves that the offence was committed without his knowledge or that he e/ercised all due diligence.

#ay ent of (ages Act, +;&:

,bjectives W To ensure regular and prompt payment of wages and to prevent the e/ploitation of a wage earner by prohibiting arbitrary fines and deductions from his wages. Applicability of the Act W W W Application for payment of wages to persons employed in any factory. ?ot applicable to wages which average Rs ,,+AA per month or more. .ages include all remuneration, bonus, or sums payable for termination of service, but

do not include house rent reimbursement, light vehicle charges, medical e/penses, TA, etc. I portant provisions of the Act W W W Responsibility of the employer for payment of wages and fi/ing the wage period. ;rocedures and time period in wage payment. ;ayment of wages to discharged workers.

W W W W W W

;ermissible deductions from wages. ?ominations to be made by employees. ;enalties for contravention of the Act. '7ual remuneration for men and women. 5bligations and rights of employers. 5bligations and rights of employees.

The Act is to regulate payment of wages to certain class of employed persons. The main purpose of this Act is to ensure regular and timely payment of wages to the employed persons, to prevent unauthori-ed deductions being made from wages and arbitrary fines being imposed on the employed persons. The Act e/tends to the whole of India. Application of the Act! The Act applies to payment of wages to persons employed in factory or railways. It also applies to any Pindustrial or other establishment8 specified in &ection 94ii6. Q&ection "4$6L. PFactory8 means factory as defined in &ection 94m6 of Factories Act. 3 3 Industrial or other establishment specified in &ection 94ii6 are 3 R Tramway or motor transport services R Air transport services R 0ock wharf or 2etty R Inland vessels R (ines, 7uarry or oil3field R ;lantation R .orkshop in which articles are produces, adopted or manufactured. 3 3 The Act can be e/tended to other establishment by &tateE entral @overnment. ;resently, the Act applies to employees drawing wages upto Rs ,,+AA. Q&ection "4,6L. 'very employer is responsible for payment to persons employed by him on wages. Q&ection *L. D0A7I7G ,9 (AG0/ 3 .ages means all remuneration e/pressed in terms of money and include remuneration payable under any award or settlement, overtime wages, wages for holiday and any sum payable on termination of employment. However, it does not include bonus which does not form part of remuneration payable, value of house accommodation, contribution to ;F, traveling allowance or gratuity. Q&ection 94vi6L H,( (AG0/ /H,6L2 =0 #AI2 3 .ages can be paid on daily, weekly, fortnightly or monthly basis, but wage period cannot be more than a month. Q&ection $L. .ages should paid on a working day. .ages are payable on or before 1th day after the Pwage period8. In case of factories employing more than ",AAA workers, wages can be paid on or before "Ath day after Pwage period8 is over. Q&ection +4"6L. Q?ormally, Pwage period8 is a Pmonth8. Thus, normally, wages should be paid by 1th of following month and by "Ath if the number of employees are ",AAA or moreL. 3 3 .ages should be paid in coins and currency notes. However, with authorisation from employee, it can be paid by che7ue or by crediting in his bank account. Q&ection ,L.

2026%TI,7/ #0.DI//I=L0 3 0eduction on account of absence of duty, fines, house accommodation if provided, recovery of advance, loans given, income ta/, provident fund, '&I contribution, LI premium, amenities provided, deduction by order of ourt etc. is permitted. (a/imum deduction can be +AV. However, ma/imum deduction upto 1+V is permissible if deduction is partly made for payment to cooperative society. Q&ection 1L. 9I70/ K &pecific notice specifying acts and omissions for which fine can be imposed should be e/hibited on notice board etc. &uch notice can be issued only after obtaining specific approval from &tate @overnment. Fine can be imposed only after giving employee a personal hearing. Fine can be ma/imum *V of wages in a month. Fine cannot be recovered in instalments. Q&ection %L. #art & Labour Law %oncessions &"+ Labour Laws and //I The @overnment of India has made several attempts to revamp, rela/ and simplify labour laws relating to &mall &cale Industries. 5ne of them is the simplification procedure envisaged by the Labour Act enacted in "#%% to assist the small establishments. The Act, namely JLabour Laws 4e/emption from furnishing returns and maintaining registers by certain establishment6 Act, "#%%J covers labour related acts and thus provides! 'stablishment employing "A3"# persons is re7uired to maintain only * register and to submit an annual core return only. 'stablishment employing less than "A persons to maintain only " register and submit only an annual core return. 5nly one Inspector will be responsible for various labour laws, e/cept in case of Factory Act and )oiler Act. The Labour ;olicies for &mall &cale Industries is governed by comprehensive laws. The following laws and policies are applicable for &mall &cale Industries in India! ". Apprentices Act, "#," 9. The )eedi and igar .orkers 4 onditions of 'mployment6 Act, "#,, *. )onded Labour &ystem 4Abolition6 Act, "#1, $. hild Labour 4;rohibition G Regulation6 Act, "#%, +. The hildren 4;ledging of Labour6 Act, "#** ,. The ontract Labour 4Regulation G Abolition6 Act, "#1A 1. The 'mployees ;rovident Funds and (isc. ;rovisions Act, "#+9 %. 'mployees &tate Insurance Act, "#$%

#. 'mployers Liability Act, "#*% "A. 'mployment '/change 4 ompulsory ?otification of =acancies6 Act, "#+# "". '7ual Remuneration Act, "#1, "9. The Factories Act, "#$% "*. The Industrial 0isputes Act "$. The Industrial 'mployment 4&tanding 5rders6 Act,"#$, "+. The Inter3state (igrant .orkmen 4Regulation of 'mployment and &ervice6 Act, "#1# ",. Labour Laws 4'/emption from Furnishing Returns G (aintaining Registers by ertain 'stablishments6 Act, "#%% "1. (aternity )enefit Act, "#," "%. The (inimum .ages Act, "#$% "#. The ;ayment of )onus Act, "#,+ 9A. The ;ayment of @ratuity Act, "#19 9". The ;ayment of .ages Act, "#*, 99. The &ales ;romotion 'mployees 4 onditions of &ervice6 Act, "#1, 9*. The &hops and 'stablishments Act, "#+* 9$. The Trade :nion Act, "#9, 9+. .orkmen8s ompensation Act, "#9* 9,. The .eekly Holidays Act, "#$9 91. The ;lantation Labour Act, "#+" The &mall Industries 0evelopment 5rgani-ation under the (inistry of &mall &cale Industries plays the role of a nodal agency for the development of small industries in India. This agency has identified the labour reforms carried out by various &tate @overnments which are as under! Andhra #radesh ,.20.?7,TI9I%ATI,7?2AT0 Labour Laws @.5. (s.?o.** 0t.+313## Amendment notified vide Andhra ;radesh @a-ette ?o.*A Amendment to the provisions of &tate Act shall apply to every industrial establishment where in +A or more workmen are employed on any day of the preceding Twelve months. @.5 (s.?o.*$ 0t.+313"### Factories Act, "#$% /6=40%T Amendment to labor 'nactments onditions of

'/empting establishments engaged in manufacturing processes from the rules $, +, G , under the Factories Act "#$% @.5 (s.?o.*1 0t.*3%3"### '/emption from rule 99,9* and 9# under Factories Act "#$% And under A?0HRA ;RA0'&H &H5;& A?0 '&TA)LI&H('?T& A T 3 for those engaged in manufacturing processes 4relate to national holidays and other festivals6 @.5 (s .?o.*% 0t.*3%3"### Amendment to the A?0HRA;RA0'&H ;AY('?T 5F @RAT:ITY R:L'& "#19 and omitting rule *9 from P:8 &ubstitution of the words Jemployee nomineeJ in place of employees. @.5 (s .?o.*$ 0t.+313"### Amendment to ,3A!(anufacturing process! ?othing in rules $,+,and , the A?0HRA ;RA0'&H FA T5RI'& A?0 shall apply to a factory under the Factories Act "#$% '&TA)LI&H('?T& 4?ATI5?AL F'&TI=AL& G 5TH'R H5LI0AY&6 R:L'&, "#1$ 4 entral Act ,* of "#$%6 or an establishment in manufacturing process as designated in section 94k6 of the Factories Act,"#$%. Assa ,.20.?7,TI9I%ATI,7?2AT0 ?otification ?o! L@L %,E%*E,9 dated 1th April, "#%$ The Assam &tate Industrial Relief :ndertaking 4&pecial ;rovisions6 Act, 5b2ective! "#%$ 4Assam Act ?o. =II of "#%$6 Received the Assent of the ;resident on 1th April "#%$ To enable the &tate @overnment to make special provisions for a limited period in respect of industrial relations, financial obligations and other like matters in relation to industrial undertakings the running of which is considered essential as a measure of prevention or of providing relief against unemployment The &tate @overnment may, if it is satisfied that it is necessary or e/pedient so to do, direct, by notification, that the operation of all /6=40%T :nder this Act, industrial units which have become sick may be declared as a relief undertaking for a total period of "A years.

or any of the contracts, assurances of property agreements, settlements, awards, standing orders or other instruments in force immediately before the date on which the &tate industrial undertaking is declared to be a relief undertaking, shall remain suspended or shall be enforceable with such modifications and ins such manner as may be specified in such notification. The &tate @overnment may, sub2ect to the condition of previous publication, make rules to carry out the provisions of this Act. &uch Rules may provide for all or any of the following matters! rates of wages payable to the workmen and their workloads and the salary payable to the staff, the payment of bonus, gratuity, compensation and other benefitsI the manner in which the relief the strength of staff and labour to undertaking should be runI be employed for running the relief undertaking economically the manner in which the net profits or net losses or surplus funds should be appropriated or disposed ofI the percentage of profits to be utilised for the benefit of persons employed in the undertaking and the manner of its utilisationI the manner in which and the e/tent to which the representatives of the workmen may be associated with or may participate in the management of the relief undertaking. The Assam &tate Industrial Relief

:ndertaking 4&pecial ;rovisions6 5rdinance, "#%* 4Assam 5rdinance ?o. =I of "#%*6 is hereby repealed. The Assam ;referential &tores ;urchase Act, "#%# 4to replace the Assam ;referential &tores ;urchase Rules, "#196 This enactment is aimed to encourage growth of industries in the &tate and to implement the Industrial ;olicy announced and published by the @ovt. of Assam vide ?otification ?o. "#%, 5b2ectives to encourage small scale and cottage L +%,E%+ dated 9$th 0ecember,

industries by preferential purchase of their products to rationali-e the procedure for purchase of stores re7uired by the &tate @overnment, companies and undertakings. The Act lays down the following ! 0efinitions onstitution of the &tate )oard Terms of the )oard ;ower and Functions 'ligibility! To be registered under this Act

and be eligible for the incentive under this Act, a unit in the small scale sector has to have "AA per cent employment of local people Assam The unit should be in regular production having re7uisite machinery ;references! &mall Industries, Ohadi and ottage The location of administrative Eregistered controlling officers shall be within the &tate of

industries registered under this Act shall be e/empted from payment of earnest money and security deposit for items in respect of which the units are registered. Items of stores mentioned in &chedule II be known as JReserved ItemsJ, shall be purchased by all re7uiring authorities from registered industries The &tate @ovt. shall from time to time publish a list of stores which shall be purchased by re7uiring authorities only from industrial units having valid &tore ;urchase Registration and in accordance with the policy laid down by the &tate )oard. In respect of items of stores other than

those mentioned in &chedule II or covered by the Act, price preference shall be given to registered industries 4or their authorised agents and dealers6 upto "A per cent in case of &mall Industries and + per cent in case of other industries of Assam. Daharashtra

,.20.?7,TI9I%ATI,7 Labour Law Reforms ?otification from 0irectorate of Industries, @overnment of (aharashtra >une 9AAA

/6=40%T The Factories Act, "#$%! Amendments in the 0efinition of JFactoryJ &mall 'stablishments with power and

employing upto 9+ workers without power and upto +A workers be e/empted Trade :nions Act, "#9,! Trade :nion should not be affiliated to

;olitical ;arties

There should be one :nion per ompany 1 or more workers combine to form a

:nion. It is recommended that the minimum number of workers should be increased to 9+ or *A per cent of the work force, whichever is higher. It is also recommended that :nder &ection 99, the '/ecutive )ody of such :nion should comprise outsiders not e/ceeding "E*rd or 9 persons whichever is less. Rationali-ation of the provisions with regard to lay3offs and retrenchments, if necessary with enhanced retrenchment compensation should be considered *AA. &ection 9+ 4?6 should contain the following proviso 3 J?otwithstanding anything contained in the foregoing provisions of this &ection, the provisions of this &ection will not apply to any workman who has been in continuous service for not less than one year under an employer and at the time of retrenchment paid compensation which shall be e7uivalent of $+ days average pay for every completed year of continuous service or any part thereof in e/cess of si/ monthsJ. (inimum .ages Act,"#$%! (inimum .ages should be fi/ed for The minimum number of workers :nder &ection 9+4O6 should be increased from "AA to

unskilled temporary workers. For other categories, they will get higher wages as per their skills and market demand. The number of schedules under the Act should be reduced, and only the lowest scale of

minimum wages 4i.e., for unskilled workers6 should be stipulated in these schedules. Inspections! =isits by Inspectors of various agencies

under the Labour 0epartment would be rationalised as follows! There would be no restriction on the

conduct of statutory inspections 4which may to the e/tent possible, be conducted 2ointly by the different inspectional agencies6, and in the case of accidents. In the case of inspections based on would be necessary. is not complaints or information received, prior approval from the concerned @(0I In case of disagreement, or when @(0I available approval may be taken from the ollector. In the case of inspections for collection of statistics, Labour 0epartment may e/amine the possibility of collection of statistics on a trial basis through selected local associations or outside agencies. In the case of technical inspection, the possibility of authori-ing technical agencies such as =>TI, =R ' etc. may be e/amine and an approved list drawn up. For all )oiler Inspections, reputed technical 5rgani-ations should be empowered to conduct such inspections. ontract Labour 4Regulation and Abolition6 Act, "#1A The Act should be amended to increase

the number of workers in the definition of

applicability to +A, sub2ect to further rela/ation to the e/tent of a minimum "AA workers in respect of units in backward areas. (aharashtra Trade :nion 4(RT:6 G ;revention of :nfair Labour ;ractices 4;:L;, "#1"6 Acts ! It is suggested that these Acts be tally

abolished as the re7uired purpose is being efficiently served with the use of the industrial disputes Act, "#$1. 6ttar #radesh

,.20.?7,TI9I%ATI,7 Labour Laws! ?otification ?o.$*9E,3;R, Oanpur, 0t. "A3%39AAA The Factories Act, "#$% &ection #9

/6=40%T

There should be a classification of offencesEviolations depending upon their seriousness. The punishment provided should be commensurate to the seriousness of the violation.

:.;. Factories Rules, "#+A Rule 1 Registration and @rant of License It is suggested that there is an urgent need to move toward long period licensing so that 'ntrepreneurs do not have to face problems of annual renewals. :.;. Industrial 0isputes Act, "#$1 &ection 94F6 Retrenchment

The utility of the :; Industrial 0isputes Act, "#$1 is no moreI therefore it should be repealed. If such repealment is not considered proper, &ection 94bb6 and 94c6 be added to &ection 9 4s6 of the :; I0 Act, "#$1.

&ection 94bb6 relates to termination of the service of the workmen as a result of non3 renewal of the contract of employment.

&ection 94c6 relates to termination of the service of the workmen on the ground of continued ill3health.

&ection , 4)6 &ettlement outside conciliation proceedings

It is suggested that &ection "%4*6 of the Industrial 0isputes Act, "#$1 be substituted in place of &ection , ).

&ection "%4*6 relates to a settlement arrived at in the course of conciliation proceedings under this Act.

(inimum .ages Act, "#+% &ection * fi/ing of (inimum Rates of .ages It is suggested that 9* categories of employment in ;art I of the &chedule and 'mployment in Agriculture of ;art II are e/cessive categories. It should be limited to two categories! skilled and unskilled workers. Trade :nions Act, "#9,

&ection 99 relating to proportion of officers to be connected with the Industry. It is suggested that not less than *E$th of the total number of office bearers be substituted to one half of the total number of &ection 99.

ontract Labour 4Regulation and Abolition Act, "#1A6 &ection "A prohibition of employment of ontract Labour It is suggested that '/emption under the ontract Labour Act to e/port oriented shall be granted by the appropriate @overnment in Time )ound &chedule. &o that '/port 5riented :nits can fulfil the e/port in the scheduled time. @ 5 0t. *3*3"##$ 4Labour 0epartment6 Approval of ;lants of the ?on3ha-ardous factories 40elegation of ;ower to Industries 0epartment 5fficers6. It was issued by Labour 0epartment for one year on e/perimental basis. It is suggested that the validity of this @5 be e/tended permanently.

(est =engal ,.20.?7,TI9I%ATI,7 Labour Laws @.5. (s.?o.** 0t.+313## Amendment notified vide Andhra ;radesh @a-ette ?o.*A @.5 (s.?o.*$ 0t.+313"### /6=40%T Amendment to labor 'nactments Amendment to the provisions of &tate Act shall apply to every industrial establishment where in +A or more workmen are employed on any day of the preceding Twelve months. 9actories Act, +;'< '/empting establishments engaged in manufacturing processes from the rules $, +, G , under the Factories

Act "#$% @.5 (s.?o.*1 0t.*3%3"### '/emption from rule 99,9* and 9# under Factories Act "#$% And under A?0HRA ;RA0'&H &H5;& A?0 '&TA)LI&H('?T& A T 3 for those engaged in manufacturing processes 4relate to national holidays and other festivals6 @.5 (s .?o.*% 0t.*3%3"### Amendment to the A?0HRA ;RA0'&H ;AY('?T 5F @RAT:ITY R:L'& "#19 and omitting rule *9 from P:8 &ubstitution of the words Jemployee nomineeJ in place of employees. @.5 (s .?o.*$ 0t.+313"### Amendment to ,3A!(anufacturing process! ?othing in rules $,+,and , the A?0HRA ;RA0'&H FA T5RI'& A?0 shall apply to a factory under the Factories Act "#$% '&TA)LI&H('?T& 4?ATI5?AL F'&TI=AL& G 5TH'R H5LI0AY&6 R:L'&, "#1$ 4 entral Act ,* of "#$%6 or an establishment in manufacturing process as designated in section 94k6 of the Factories Act,"#$%.

&"$ Labour Laws and /0M The @overnment of India has offered a number of incentives both monetary as well as non3 monetary to the units operating in &'B. In order to create a conducive business environment in which the entrepreneurs and enterprises have complete freedom to conduct their business operations and to remain globally competitive, &tate @overnments have been empowered to amend the Labour Laws according to their re7uirements. ?ormal Labour Laws are applicable to &'Bs, which are enforced by the respective state @overnments. The &tate @overnments have been re7uested to simplify the proceduresEreturns and for introduction of a single window clearance mechanism by delegating appropriate powers to 0evelopment ommissioners of &'Bs. The following are some of the changes brought in by &tate @overnments with respect to Labour Law Regulations! ". The powers of the Labour ommissioner are delegated to the designated 0evelopment

ommissioner or other authority in respect of the area within the &'Bs. 9. (odalities have been devised for the grant of various permissions re7uired from the Labour ommissioner within the &'Bs themselves through the stationing of e/clusive personnel for the purpose or through other means so that clearances relating to various labour laws can be provided at a single point in the &'Bs. *. '/cept in emergent circumstances, the prior permission of the 0evelopment ommissioner or other designated authority of the &'Bs would be re7uired for the

conduct of inspections of these agencies of industrial units and other establishments within the &'Bs. $. The ;owers of the 0evelopment hief Inspector of Factories G )oilers are delegated to the designated hief ommissioner or other authority in respect of the area within the &'Bs.

+. (odalities have been devised for grant of various permissions re7uired from the

Inspector of Factories G )oilers within the &'Bs themselves through the stationing of e/clusive personnel for the purpose or through other means so that clearances relating to various labour laws can be provided at a single point in the &'Bs. ,. '/cept in emergent circumstances, the prior permission of the 0evelopment ommissioner or other designated authority of the &'Bs would be re7uired for the conduct of inspections by these agencies of industrial units and other establishments within the &'Bs. 1. All industrial units and other establishments in the &'Bs area declared as C;ublic :tility &erviceD under the provisions of the Industrial 0isputes Act. %. &ub2ect to the &tate Legislature approval and @overnment of India8s assent, amendments shall be proposed to the Industrial 0isputes Act. The proposed amendments include, inter3alia, limiting the applicability of workmen, etc. &imilarly, the hapter =) to industries employing *AA or more ontract Labour 4Regulation G Abolition6 act is proposed to

be amended to e/clude certain peripheral service activities. Incase it is not found feasible to amend these statues as proposed, similar amendments will be proposed only for units and establishments within the &'Bs. #. &everal provisions of Industrial 0isputes Act and Factories Act have been identified which have created unnecessary hindrances in the smooth functioning of the &'Bs. The &tate @overnments have resolved to do away with those provisions or simplify them. "A. Apart from this, the &tate @overnments are also empowered to get the inspection done by some e/ternal agency regarding the health and safety aspects of the labourers working in the units of the &'B. "". (any &tate @overnments have notified have a single reporting format for &'B units which would cover all the applicable labour laws. The following list provides a list of the some of the amendments proposed with respect labour law regulations! #art ' (hich court to approach in case of a labour dispute) '"+ 4udicial /yste in India

The 2udicial system in India is 7uite well3established and independent. The &upreme ourt of India in ?ew 0elhi is the highest ourt of Appeal. 'ach &tate has a High subsidiary 0istrict guaranteed by the onstitution of India. ourt and ourt along with ourts, which enforce the rule of law and ensure fundamental rights of citi-ens,

India has a three3tier court system with a typical Indian litigation starting from a 0istrict

reaching its logical conclusion in the &upreme ourt of India. The High ourts along with the various &tate level forums, situated mostly in the &tate capitals, constitute the middle rung of this three3tier system. 0istrict level courts are the courts of first instance in dispute resolution e/cept in cases where they are prevented from being so by virtue of lack of pecuniary 2urisdiction. involving violation of fundamental rights are filed in respective High ourt or &upreme ourt. ases

A number of special courts and tribunals have been constituted in India to deal with specific disputes! 3 ". Ta/ Tribunals 9. onsumer 0ispute Redressal Forums *. Insurance Regulatory Authority of India $. Industrial Tribunals +. 0ebts Recovery Tribunals ,. ompany Law )oard 1. (otor Accidents laims Tribunals %. Labour ourts '"$ (here to file) (ost of the labour disputes are referred to the Labour starts with filing of a petition before Labour

ourtsEIndustrial Tribunals through the

0epartment of Labour under the respective &tate @overnment. The process for labour dispute onciliation 5fficer and in case no compromise is ourtEIndustrial Tribunal. In certain possible, the said officer sends a failure report to the @overnment. After consideration of the said report, the @overnment may send a reference to the Labour matters, the labour dispute can be directly filed in the court concerned. Labour %ourts These courts are found in every district and they form the courts of original 2urisdiction under which various labour laws and rules are enforced. Appellate Labour %ourts These courts hear only the Appeals and revisions originating from the 2udgements and orders of the subordinate original labour courts and officers, under the provisions of various labour and related laws.

a6 .hen an industrial dispute has been referred to a Labour duty of the Labour ourt to 4i6 4ii6 Hold proceedings e/peditiously, and

ourt for ad2udication, it is the

To submit its award to the appropriate @overnment soon after the conclusion of the proceedings.

b6 However, no deadline has been laid down with respect to the time within which the completion of proceedings has to be done. ?onetheless, it is e/pected that these hold their proceedings without getting into the technicalities of a ivil reference of disputes to the Labour %ourt 9ee ?o ourt fee is payable on the petitions filed before Labour ourts and Industrial Tribunals. ourts. These ourt. ourts

c6 It has been held that the provisions of Article "*1 of the Limitation Act do not apply to ourts can change the relief granted by refusing payment of back wages or directing payment of past wages too.

'"& (hat atters fall within the jurisdiction of Industrial Tribunals) ". .ages, including the period and mode of payment 9. ompensatory and other allowances *. Hours of work and rest intervals $. Leave with wages and holidays +. )onus, profit sharing, provident fund and gratuity ,. &hift working otherwise than in accordance with standing orders 1. lassification by grades %. Rules of discipline #. Retrenchment of workmen and closure of establishment '"' (hat atters fall within the 4urisdiction of Labour %ourts) ". The propriety or legality of an order passed by an employer under the standing orders 9. The application and interpretation of standing order *. 0ischarge or dismissal of workmen including re3instatement of, or grant of relief to, workmen wrongfully dismissed. $. .ithdrawal of any customary concession or privilege +. Illegality or otherwise of a strike or lock3outI and ,. All matters other than those being referred to Industrial Tribunals.

'"* /tages of adjudication in labour or industrial disputes The first is receiving a reference from the appropriate @overnment or filing of the labour dispute in the Labour ourt. The ne/t step is sending notice to the (anagement and after filing of the response by them, the matter is fi/ed for ad2udication. The fourth step is recording the evidence

of the parties and hearing the arguments. It is appropriate to mention here that advocates cannot appear in Labour ourtsEIndustrial Tribunals, unless permitted. The final conclusion of the dispute After hearing the parties, the Labour 0epartment as per rules. 0Fecution of Awards In case the management does not comply with the terms of the award, the workman may pray for its e/ecution by moving an application before the concerned onciliation 5fficer. ourtEIndustrial Tribunal decides the dispute and the said final decision is called an Award. A copy of the award is to be published by the Labour opies of the same are also sent to the parties concerned.

'": Dediation in Labour 2isputes (ediation is an e/ercise of resolving a dispute by settlement with the help of a (ediator who is a neutral third party. The mediator may be! a6 ]A 2udicial officer 4retired or sitting 2udge6 b6 An Advocate c6 An otherwise trained professional .hen a sitting 2udicial officer acts as a mediator in a case, his services are available free of cost and without any other charges on any of the parties. .ole of the Dediator A mediator helps the parties in arriving at an amicable solution through negotiation. He facilitates the parties in reaching a mutually acceptable agreement. The parties need not agree to the terms of settlement, if they are not satisfied. >udges and arbitrators make decisions that are imposed on parties but a mediator helps the parties to evaluate the probable outcome of a dispute and then leads them to an acceptable settlement. #rocess of Dediation A mediator meets both the parties in a 2oint mediation session. The initial meeting provides for! a6 An introduction to the participants and the mediation process. b6 An opportunity to discuss issues affecting settlement that are important for the mediator to know. c6 An opportunity to determine what information would be helpful for the mediator to have at or in advance of the mediation. The 2oint session provides an opportunity for each participant, either directly or through counsel, to e/press their view of the case to the other participants and how they would like to approach settlement. The opening statements are intended to begin the settlement process, not to be adversarial or a restatement of positions.

D02IATI,7 #.,%026.0 Formal procedures as in a ourt or arbitration are completely absent in mediation proceedings. )oth parties and their advocates participate freely without any set procedures or any rules of evidence. The absence of formality provides for an open discussion of the issues and allows a free interchange of ideas making it easier for the parties to determine their interest and fashion a solution accordingly. A mediator may, if necessary, meet the disputing parties individually and in private. &uch meetings are completely confidential and are intended to understand the needs of each participant and what prevents him or her from reaching a settlement. In these private meetings, the mediator often assists parties to prioriti-e their interest and options for settlement and to assess the relative strengths and weaknesses of their positions. 5nce a settlement is reached, the mediator records it with the signatures of the parties. /o e i portant points in the Dediation #rocess a6 All mediation proceedings are confid ntial2 0ocuments generated for the mediation are also confidential and may not be introduced during a subse7uent trial should the case not settle. b6 ounsel and parties with # ttl m nt aut$ority must attend mediation sessions. ertain e/ceptions may be granted for institutional parties or if a party is a unit of government. c6 :nless the presiding 2udge indicates otherwise, referral of a case to mediation do # not #tay other proceedings in the case or alter applicable litigation deadlines. A 2udicial officer may, while referring a case to mediation, fi/ a time limit for completing the mediation process. Advantages of Dediation Dethod for 2ispute .esolution AiB #rocedures ore satisfying results a6 Helps settle all or part of the dispute much sooner than regular trial. b6 ;ermits a mutually acceptable solution that a court would not have the power to order. c6 &aves time and money d6 ;reserve ongoing business or personal relationships e6 Increases satisfaction and thus results in a greater likelihood of a lasting resolution. AiiB Allows ore fleFibility, control and participation

a6 Tailors the procedures used to seek a resolution b6 )roadens the interests taken into consideration c6 Fashions a business3driven or other creative solution that may not be available from the court. d6 ;rotects confidentiality

e6 'liminates the risks of litigation AiiiB 0nables a better understanding of the case a6 ;rovides an opportunity for clients to communicate their views directly and informally b6 Helps parties get to the core of the case and identify the disputed issues. c6 Helps parties agree to e/change key information directly. AivB I proves case anage ent

?arrows the issues in dispute and identifies areas of agreement and disagreement. AvB .educes hostility a6 Improves the 7uality and tone of communication between parties. b6 0ecreases hostility between clients and lawyers. c6 Reduces the risk that parties will give up on settlement efforts. How to Initiate Dediation) .here both the parties agree in a pending case to try to get their dispute settled through (ediation, the ourt will record the same and send the file to (ediation entre.

#art * *"+ Address of Labour %o AiB issioners

Anda an and 7icobar Islands

Telephone! 4A*"#96 9**"*% E 9*9+$1 'mail! lcdetXand.nic.in .ebsite! http!EElabour.and.nic.inE AiiB 2elhi

5ffice of the Labour ommissioner @overnment of ?. .T. 5f 0elhi +, &ham ?ath (arg, 0elhi 3 ""AA+$. Tel ?os. Fa/! #"3""39*#,1$#+ #"3""39*#,9%9*

'3mail Address! 2lcadmlabXhub.nic.in .ebsite! http!EElabour.delhigovt.nic.inE

AiiiB

Gujarat

5ffice of Labour ommissioner, )lock ?o. "$, 9nd Floor, :doyg )havan, &ector 3 "". @andhinagar 3 *%9 A"*. @u2arat. Telephone! \#"39*93+1+AA 456 Fa/! (obile! .ebsite! AivB \#"39*93+1+A9 \#"3#%9+A $#"%" www.labourandemployment.gov.in

Hi achal #radesh

Labour ommissioner cum 0irector of 'mployment ?ew Himrus )hawan, ircular Road, &himla3"1"AA". Telephone! 4A"116 9,9+A%+ 'mail! landeXsancharnet.inI lep3hpXnic.in .ebsite! http!EEhimachal.nic.inE'mploymentE AvB Earnataka

ommissioner of Labour (r. O.&. (an2unath Oarmika )havan, ITI ompound, )annerghatta Road, )angalore3+,A A9#. Telephone! 4A%A6 9,+* "9+9 .ebsite! www.labour.kar.nic.in AviB Eerala

5ffice of the Labour ommissioner, Housing )oards )uilding, Thiruvanathapuram, Oerala. Telephone! 4A$1"6 9**A$"$ .ebsite! www.labourkerala.gov.in AviiB Daharashtra entre, Tardeo Road,

5ffice of the Labour ommissioner, ommerce (umbai.

.ebsite! http!EEindustry.maharashtra.gov.in AviiiB 7agaland

5ffice of the >oint Labour ommissioner @overnment of ?agaland, 0istrict Labour 5ffice, .okha, ?agaland. Telephone! \#" 4*1"6 991"",% 'mail! labouremploymentXyahoo.com .ebsite! www.labourngl.nic.in AiFB .ajasthan

ommissioner of 4Labour G 'mployment6 0epartment 5ffice of Labour ommissioner, @ovt. of Ra2asthan >aleb howk, >aipur3*A9AA9, Ra2asthan ;hone ?o! A"$"39,A1$1*, 9,"%+"1, 9,"#9+, .ebsite! www.ra2labour.nic.in AiFB #unjab

0epartment of Labour ommissioner, ;un2ab, & 5 ?o. $13$%, &ector 3 "1 ', handigarh 3 ",AA"1 ;hone! \ #"3"19391A9$%, Fa/! \ #"3"19391A$A#" 'mail! delcXpun2abmail.gov.in .ebsite! www.pblabour.gov.in AFB Lakshadweep

0istrict 'mployment 5fficer 0istrict 'mployment '/change :nion Territory of Lakshadweep Oavaratti 3 ;in!,%9 +++ ;hone! A$%#,9,9A%9

Fa/! A$%#,9,*A*+ 'mail ! lk3deeXhub.nic.in .ebsite ! AFiB 0(& www.lakemployment.gov.in

Ta il 7adu omple/, hennai ,AA AA,.

Labour ommissionerate Teynampet,

Telephone!9$*9 "$*%E 9$*9 "$A%E9$*9 "+A# .ebsite! http!EEwww.tn.gov.inEdepartmentElabour.htm

*"$ A=,6T TH0 A6TH,.

A highly acclai ed acade ician and an active profession" He is a =usiness %o ittee

e ber in various professional bodies,

.ajku ar /" Adukia has been working tirelessly for the cause of the e ber of the #rofessional accountants in A#AI=B of International 9ederation of

Accountants AI9A%B and the %entral %ouncil of the I%AI" He is a member of numerous committees of the Institute and is actively involved in their working. He has conducted about +AAA seminars G workshops. His practice areas include corporate and international laws and pro2ect work. )esides this book, he has authored a number of books on vast range of topics including Internal Audit, )ank audit, AR5 and real estate , has contributed articles to newspapers, and maga-ines and presented papers at national and international seminars. 0rawing on his e/perience from practice of 9, years and his interaction with accounting bodies worldwide, the author has come out with this book titled3 CA handbook on Labour Laws in India!. This book is a simple approach to labour laws, with labour laws e/plained in the laypersonFs language. It provides coverage of employment relationship and procedure, employment obligations, and employment regulation. The book is valuable as a guide in its current form for those working in human resources, employers, employees as well as corporate attorneys. This book is intended to instruct employers on how to manage its work force effectively and efficiently. Thus the book attempts to provide vital background information on labour laws in India. The author has also written a detailed book on this sub2ect titled C LA=,6. LA(/ ,9 I726/T.J one should know Afor e ployers3 e ployeesB"

This book covers e/haustively covers wide range of topics like Labour 2urisdiction under the onstitution of India =arious entral Legislations Labour Laws for &&Is and &'Bs ;rocedure for filing a case in a labour courtEindustrial tribunal, etc.